Mike Wilson, equities strategist at Morgan Stanley, argued the recent swings and underperformance in tech were “signs of what can happen when trends change and heavy positioning comes undone.”

Further pressuring the tech outlook, Congress is poised to pass tax reform measures by the end of the year. While lower tax rates are expected to be good for the economy, investors have refocused on other underperforming sectors, like financials and telecom, that are thought to have more room to run, compared to the extended rally in technology.

“High tax rate and domestic-facing sectors have the most to gain from corporate tax reform, while low tax sectors such as info tech and healthcare stand to benefit the least,” David Kostin, Goldman Sachs head US equities strategist, said at the end of last week. “We continue to recommend a neutral weight in info tech given limited relative benefits from tax reform, elevated valuations and risk of government regulation.”

For more information on the tech segment, visit our technology category.