(Bloomberg) -- The initial rally in technology stocks after the Federal Reserve meeting proved to be short-lived with the shares of most megacap companies closing lower for the week.
Apple Inc. and Microsoft Corp., the largest by market , were the two worst performers. Apple suffered a drop of 4.6%, its worst weekly decline since February. Microsoft fell 5.5%, the biggest weekly decline for the software maker since October 2020. Google-parent Alphabet Inc. sank 4.2%.
The volatility in the world’s biggest technology stocks highlights concerns about the Fed’s inflation-fighting shift and economic growth amid rising Covid-19 cases. A spike in interest rates could put pressure on stocks with higher valuations, especially if profit growth is shrinking.
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Apple remains a big stock market winner after a rally over the past month. The stock is up 29% since the start of the year and is outperforming the S&P 500 and Nasdaq 100. Microsoft has gained 46% in 2021, creating more than $700 billion in market .
Facebook parent Meta Platforms Inc. was the only gainer this week among the five biggest U.S. companies with an advance of 1.2%.
So far most of the damage in the tech sector has been confined to formerly high-flying stocks that tend to be less profitable and therefore more susceptible to pressure from higher interest rates that are used to the present of future cash flows. An exchange-traded fund that tracks software companies is down 13% from a November peak.
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