Danske Research Team notes that global equities fell, with the S&P 500 down 0.4% and Stoxx 600 off 1% on Iran-related headlines. The session was characterized as de-risking, with most sectors lower except tech and energy. Defensive sectors outperformed, and software stocks gained 2%, leading the team to argue that the latest tech stock rotation remains strong and is likely to continue.

Risk-off session still favors technology

"Equities were lower yesterday. S&P 500 -0.4% and Stoxx 600 -1% in a volatile session, characterized by Iran headlines. This was a de-risking session in equities, with almost all sectors lower but tech and energy."

"Defensive stocks outperformed, including health care and tech while industrials, materials and consumer discretionary sold off ~-1%. It is interesting to see tech outperforming even in a defensive session like yesterday, especially as yield were materially higher."

"This mix would easily have made the tech the worst performing sector three months ago. Instead, software stocks even bounced 2% yesterday, outperforming the market by a meaningful 3pp."

"This says something about the strength of the latest tech stock rotation. As our readers will know, we see it continuing. "

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)