The technology-led sell-off of growth stocks is buffeting global stock markets. The Nasdaq Composite fell as much as 11% from its all-time high (at the point of writing), a mark it hit barely a month back, and is sitting on a loss of 2.1% for 2021. By comparison, the broader Standard & Poor’s 500 index is holding up better, down only 3.3% from recent highs and up 2.3% year to date.

The Dow Jones Industrial Average, on the other hand, is just a hair’s breadth away from record-high levels and is up 2.9% so far this year. This is a reversal of what transpired last year, when the Nasdaq gained 43.6%, well ahead of the DJIA’s 7.3% increase and the S&P 500’s 16.3% advance.

What we are now seeing is a massive market rotation, from growth and tech stocks — that were the big gainers during the Covid-19 pandemic — to cyclical and value stocks that will benefit from normalisation of economic activities and whose outlooks are further boosted by the passage of the US$1.9 trillion (S$2.56 trillion) fiscal stimulus package. A case in point: Stocks such as The Walt Disney Co and JPMorgan Chase & Co have gained in this current selldown (see Chart).

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