Are tech stocks still worth a look after CPI came in hotter than expected?
After CPI came out last night, the Nasdaq fell nearly 2%. Many people’s first reaction was: Are tech stocks no longer worth considering? Or, since they’ve fallen, should we buy the dip right away?
I’d rather start by breaking down the data and how it feeds through the market.
September headline CPI rose 0.6% month over month and 3.7% year over year; core CPI rose 0.3% month over month and 2.6% year over year. Higher gasoline prices did push up the headline figure, but the market was more concerned that core CPI also came in above expectations. That makes the expectation that “inflation will soon come down on its own” seem less certain.
Tech stocks are more sensitive to interest rates—not because they’re necessarily bad investments, but because the valuations of many companies depend more heavily on future growth and cash flow. When the market raises its expectations for interest rates, financing costs, or returns on AI capital spending, valuations are the first thing to be repriced.
But don’t attribute yesterday’s drop solely to one CPI report, either. Financing costs for AI infrastructure, debate over returns on capital spending, and company earnings will all affect tech stocks.
For me, the right move now isn’t to rush to find an answer like “it’s definitely going up” or “it’s definitely going down,” but to keep an eye on three things: core inflation, bond yields, and whether tech companies can demonstrate returns on their investments through revenue, margins, and cash flow.
Opportunities aren’t simply a matter of “the price has fallen.” First, think this through: if prices fall further, can your position size, time horizon, and emotions handle it?
This article is for educational and informational purposes only and does not constitute investment advice. The data and views are current as of 2026-10-15; market-related information may change as new data becomes available.
After CPI came out last night, the Nasdaq fell nearly 2%. Many people’s first reaction was: Are tech stocks no longer worth considering? Or, since they’ve fallen, should we buy the dip right away?
I’d rather start by breaking down the data and how it feeds through the market.
September headline CPI rose 0.6% month over month and 3.7% year over year; core CPI rose 0.3% month over month and 2.6% year over year. Higher gasoline prices did push up the headline figure, but the market was more concerned that core CPI also came in above expectations. That makes the expectation that “inflation will soon come down on its own” seem less certain.
Tech stocks are more sensitive to interest rates—not because they’re necessarily bad investments, but because the valuations of many companies depend more heavily on future growth and cash flow. When the market raises its expectations for interest rates, financing costs, or returns on AI capital spending, valuations are the first thing to be repriced.
But don’t attribute yesterday’s drop solely to one CPI report, either. Financing costs for AI infrastructure, debate over returns on capital spending, and company earnings will all affect tech stocks.
For me, the right move now isn’t to rush to find an answer like “it’s definitely going up” or “it’s definitely going down,” but to keep an eye on three things: core inflation, bond yields, and whether tech companies can demonstrate returns on their investments through revenue, margins, and cash flow.
Opportunities aren’t simply a matter of “the price has fallen.” First, think this through: if prices fall further, can your position size, time horizon, and emotions handle it?
This article is for educational and informational purposes only and does not constitute investment advice. The data and views are current as of 2026-10-15; market-related information may change as new data becomes available.