Tech stocks fell Tuesday morning after Federal Reserve Chair Janet Yellen said their companies may be overvalued.
“Valuation metrics in some sectors do appear substantially stretched — particularly those for smaller firms in the social-media and biotechnology industries,” Yellen wrote in a semiannual monetary report to Congress.
This “stretch” was apparent even “despite a notable downturn in equity prices for such firms early in the year,” she added.
Facebook, Twitter, Google, and Apple were all down between 0.4 and 1 percent on the day. The Dow Jones industrial average has been basically flat.
Any long-term effect on the stocks remains to be seen. All four staged afternoon rallies to erase some, but not all, of their morning slides.