Tech stocks have rebounded in the first half of the year, with the S&P 500 technology ETF (XLK) up almost 150%, after the industry was slammed by rising interest rates in 2022. With the Federal Reserve's next policy announcement coming up in May, investors are looking for light at the end of the rate-hike tunnel. Kenny Polcari, Kace Capital Advisors Managing Partner, tells Yahoo Finance that a Fed pause could be a benefit for the tech industry.
Last week's weekly jobless claims bolstered bets that the Fed may pause its interest rate-hike cycle in an effort to tame inflation. "I think the cuts come in 2024, and then I would expect tech to continue to perform well," Polcari says.
If the Fed is forced into another position to raise rates due to rising inflation, Polcari says it would be bad for the industry. "Tech isn't going to like that, and investors are going to take money out [of tech]...and a bunch of areas of tech...will immediately come under pressure," he says.
Polcari spoke with Yahoo Finance's Brad Smith and Rachelle Akkuffo. Watch the entire interview here.
Key Video Moments
00:00:03: Tech bull run
00:00:25: Fed pause camp
00:00:40: Inflation & tech
