Quantum Stocks Fall as Rate-Hike Odds Climb: IonQ Sinks 4%, Rigetti and D-Wave Pull Back
Quantum computing stocks are experiencing a decline as the odds of a Federal Reserve rate hike increase. IonQ stock is leading the drop, falling 4% to $38.77, while Rigetti Computing and D-Wave Quantum each see a 2% decrease. The SPDR S&P 500 ETF Trust, which tracks the broader market, only drops 0.6% in comparison. This shift implies a rotation out of speculative growth stocks, such as quantum computing, into safer investments.
The 10-year Treasury yield is near a high of 4.8%, which increases discount rates applied to future cash flows. With no current earnings to offset this, pure-play quantum stocks are particularly vulnerable to changes in interest rates. Quantum Computing Inc's stock also drops 0.79% to $8.15. The debate over the impact of interest rates on pre-revenue growth stories remains alive as the Federal Reserve's meeting next week looms.
Traders are assigning a 60% probability to a quarter-point interest rate hike at this meeting, driven by rising crude oil prices and concerns over inflation.
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