"However, in 2025, investors have also begun to notice that the Federal Reserve's rate path is growing murkier and that expectations have started to fade in the tech world, leading investors to find fewer and fewer reasons to stay overweight in tech stocks. The Invesco QQQ Trust (NASDAQ:QQQ), one of the most popular ETFs backed by some of the biggest names in tech, has started to see some drag as names like Microsoft and Meta waver in returns."
"For income investors, the math in the tech world isn't adding up like it used to, as the average tech dividend is hovering under 1%, while the energy and industrial sectors offer 3-5% dividend yields. The lack of a dependable income means that staying in tech means that you are placing your bets on price appreciation in this increasingly uncertain market."
Tech stocks produced substantial growth since the early 2010s but rising overvaluation concerns are prompting a shift in allocations. Federal Reserve rate-path uncertainty and fading growth expectations have reduced incentives to remain overweight in tech. Major tech-focused ETFs have shown drag as leading names wobble, and average tech dividend yields remain below 1%. Energy and industrial sectors offer 3–5% yields and are gaining traction as a defensive, income-producing core. Large investors and hedge funds are also allocating to renewable energy as a future-oriented investment within this rotation.
Read at 24/7 Wall St.
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