Tech rally shows signs of losing steam

In the coming days, the tech sector will face a key test when the world's most-valuable listed firm Nvidia reports earnings

- Hannah Erin Lang & Bradley Olson

The prospect of lower interest rates is boosting many parts of the market: real-estate firms, banks, manufacturers. The outlook for Wall Street's most popular stocks—the Magnificent Seven tech giants that have led major indexes to records—is much less clear.

Nvidia, the world's most-valuable listed company, reports earnings. What investors learn there could be key to further gains. Joshua Boyer, 43, said he has trimmed his exposure to megacap tech stocks like Nvidia, Microsoft, and Meta by about 25% in recent days. The Phoenix resident said shares have grown expensive relative to the companies' earnings and said he's satisfied with the outsize returns over the past several months.

"Anytime I see them getting top-heavy, I'm totally fine taking some money off the table," he said.

He isn't alone. Even after Federal Reserve Chairman Jerome Powell sparked a broad rally Friday by opening the door to rate cuts in September, tech posted a 1.6% slide for the week, lagging behind S&P 500 sectors including energy, materials and real estate, which all added more than 2%.