Thursday wasn’t a banner day for tech stocks, with many of them tumbling along with the general dynamic of the market. Among the tumblers were some famous names and several up-and-comers.

Both listed stocks of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) lost nearly 2% of their value, while social media giant Meta Platforms (NASDAQ: META) declined by 1.5%. Hardware specialist Super Micro Computer (NASDAQ: SMCI) and leading artificial intelligence (AI) developer C3.ai (NYSE: AI) also fell, by 4.9% and 3.6%, respectively.

Watch those bond yields

There was little news specific to any of these companies — or to publicly traded businesses throughout the tech sector, broadly speaking — to push their share prices down.

Rather, it was more of a pull-back from a Wednesday trading session that saw notable gains following the release of the government’s latest quarterly gross domestic product (GDP) figures. What goes up will come down sooner or later, and this trend is amplified by the general volatility of stocks in this industry.

One notable factor in this Jekyll-and-Hyde transformation was an uptick in benchmark bond yields on Thursday. This was atypical for such assets, which, on improving confidence in the economy, had generally been sliding lately. The fuel for this fire was provided by the presidents of the New York and San Francisco Federal Reserve Banks, both of whom implied the Fed should at least maintain its current key-interest rates.

Although debt instruments are very different types of securities when compared to stocks, their trajectory matters to the equity market. If there’s a rise in the yield of the 10-year U.S. treasury note, considered to be the most indicative debt security, this generally comes at the expense of riskier assets.

Even though many companies in the tech sector are blue chip stocks or close to blue chip status, the sector as a group is considered to be fairly risky. Hence the outflow of funds from such stocks on the second-to-last trading day of the week.

Balance on the balance sheet

Flickers in yield don’t generally pan out into sustained rallies or pronounced declines in stocks no matter how inherently volatile they may be.

So a good move at times like these is to take a closer look at these companies’ businesses to determine if what’s happening in the macroeconomy could directly and seriously impact them. If a business is, say, indebted and still in need of financing, an increase in interest rates could affect its balance sheet more badly than expected. Ultimately, though, no one should be spooked by the dips in any of these stocks Thursday.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool recommends C3.ai and Super Micro Computer. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: GOOGL Feed: Why Many Tech Stocks Tumbled on Thursday