Quantum computing stocks experienced a significant downturn on Monday, as several companies saw their shares tumble amid rising bond yields and broader market unease. The sell-off followed last year's optimism surrounding Alphabet's chip announcement, which had initially buoyed the sector. D-Wave's stock plummeted over 16%, while IonQ's shares fell by 11%. Meanwhile, Rigetti Computing experienced a steep 29% decline, with Palantir also dropping nearly 4%.
The downturn in quantum computing stocks coincided with a rise in bond yields, as the 10-year Treasury yield reached its highest point since late 2023. This financial climate has created a challenging environment for speculative names within the technology sector. On Monday, other technology stocks also faced declines, with Tesla's shares falling by 3%.
The market's movements came after a week of losses for several prominent tech and quantum computing companies. The recent strong jobs report cast doubt on the Federal Reserve's plans to continue cutting interest rates, further unsettling investors. Many took profits on their 2024 winners and offloaded speculative stocks amid this uncertain economic backdrop.
The impact of these developments extended beyond quantum computing. Last year's Nasdaq winner, AppLovin, saw a sell-off of about 3%. In the semiconductor sector, Broadcom and Advanced Micro Devices each slumped around 2%, while Micron Technology's shares declined approximately 3%. Nvidia CEO Jensen Huang added to the cautionary sentiment by suggesting that useful quantum computers might still be decades away.
Monday's market turbulence reflects growing concerns among investors about the trajectory of interest rates and the viability of speculative technology investments. With bond yields rising and economic indicators suggesting a shift in monetary policy, the pressure on tech stocks has intensified. As a result, companies popular with retail investors have faced increased scrutiny and selling pressure.