Jerome Powell, the Chair of The Federal Reserves of The United States just threw cold water on Wall Street’s big tech party. Just after hours of cutting rates, Powell dubbed U.S. stocks as “Fairly High Valued”. The statement effectively signals to the investors that the era of justifying a trillion-dollar valuation might be ending. 

This is more than cautious fed talk, it’s a reality check. The massive valuation of tech-giants were built in an era of near-zero rates and endless liquidity. Now with higher borrowing costs and tighter financial conditions (as hinted in the speech) companies like Apple, Microsoft, and Nvidia, that drive the S&P 500 have to rethink what Fair-value actually means. 

Big Tech Bubble Under Scrutiny

Jerome Powell’s warning wasn’t random, it came just after the Federal Reserve implemented a 25 basis point interest rate cut in September 2025. Together the two announcements demonstrate that Federal Reserves is a little concerned about how much of the U.S. stock market is tied up to big tech. It’s a dig at the fact that these giant size tech companies trade at future hopes and not on today’s profit. 

Companies like Tesla and Nvidia trades at approximately more than 60X earnings, thanks to the IA buzz. In times of net-zero rates, those valuation made future growth look way more fruitful than it actually was. As money gets more expensive, those trillion-dollar valuation will have to prove they’re earned and not a result of cheap liquidity. 

With rates no longer so friendly, these companies may be booking at a valuation reset and a dipped stock price, not because of a weak business model but because of the changed maths. 

Fragility Under Feds

The market responded quickly, as Nasdaq fell 1% versus the  S&P’s 0.6%, this shows that investors realize that Powell’s statement would take the hardest swing at Big tech. Unlike traditional stocks that pay steady dividends and have a tangible asset base, tech-giants’ valuation rests on investors’ willingness to pay a premium for anticipated growth. 

Corporations like Amazon that trades on long term growth prospects rather than immediate profitability, or Google, whose ad business run on continued economic expansion are under direct threat as Feds question current valuation. 

The strength of these tech-titans, The Promise Of Tomorrow, is now becoming their Achilles Heels. Powell’s statement is a warning that trillion-dollar valuation has to show real earning power behind, mere hype won’t cut it. 

The warning by Powell is that the age of limitless valuation fueled by cheap money is over. Tech-giants can no longer play on the promises of tomorrow as investors now have more shielded alternatives. 

The investors also need to see through the reality that the valuation of these companies was partially a function of monetary policy rather than pure business superiority. How much of this statement stands to its claim and does it really achieve what it has set out to achieve is yet to be seen.