Tech Stocks Bounce, but the Bond Market Still Sets the Tone
Technology stocks bounced back on November 6, 2026, after what Reuters described as their worst selloff in more than a year. The rebound did not reverse the broader trend. The Nasdaq Composite Index posted its fourth straight weekly decline in the week ending that day.
The equity moves are tied to a bond market under pressure. Yield is the annual return a bond pays, expressed as a percentage of its price. Because a bond's payments are fixed, yields rise when prices fall. In early October, Bloomberg reported that long-end Treasury yields, the rates on the longest-dated U.S. government debt, had reached fresh 24-year highs in a Treasuries slump. Earlier still, a WSJ report dated September 23 said bond yields had jumped to their highest levels in nearly two decades, with the dollar rising and stocks falling.
The pressure eased somewhat in late October. On October 22, the 10-year Treasury note yield slipped below 5% in midday trading as a tech selloff deepened.
Equities followed the same path. On November 2, the WSJ reported that Intel, Nvidia and SpaceX shares rose premarket after falling in the prior week's tech selloff. Nvidia then gained 3.91% on November 6, including regular-session and after-hours trading, according to Yahoo Finance quote data.
The valuation debate is sharpest around Nvidia. A WSJ article published September 29 reported that the stock trades at 25 times its fiscal year's forecast earnings. That means buyers are paying 25 dollars for each dollar of expected profit for that year. The same piece reported that the company's operating margin doubled in four years. Its headline argues that the buyback created "phantom value," a claim about how per-share results relate to underlying operations.
In my view, the rebound and the valuation question are two sides of the same rate problem. A multiple of 25 times forward earnings is a bet that profits arrive over years and are worth more today than their discounted value implies. When the 10-year yield sits near 5%, the discount rate applied to that stream rises, so the price has to clear a higher hurdle. Longer-dated cash flows are the most exposed, which is why a stock valuation can look stretched precisely when long yields are at multi-decade highs.
That is also why the bond-based comparisons deserve scrutiny. Many of these gauges set the earnings yield on stocks, the inverse of the price-to-earnings ratio, against Treasury yields. The WSJ's November 2 piece is headlined "This Bond Measure Says Stocks Are Cheap. Don't Believe It," and the headline itself is the warning. A stock's earnings yield is only as reliable as the earnings behind it. A Treasury yield is only a fair benchmark if the risk and time horizon of the two assets are comparable. Check which earnings figure and which maturity are being used before drawing a conclusion from any such ratio.
A one-day gain after a fourth weekly loss is a data point, not a trend. The variables that drove the October and early November moves are the same ones to track: long-end Treasury yields, the 10-year level around 5%, and whether earnings expectations for the largest chip companies hold up as their margin gains are tested.
