What happened
Shares of Fastly (FSLY 3.90%) were sliding today as investors continued to be concerned about the likelihood that the Federal Reserve will raise interest rates throughout 2022.
The tech stock was down by 4.9% as of 11:16 a.m. ET.
So what
The Fed has a two-day policy meeting starting today and investors are eager to find out any new information about what it will do about interest rates this year. The Fed is expected to raise interest rates as early as March.
Image source: Getty Images.
Higher interest rates can cause consumers to spend less and encourage companies to borrow less money -- both of which can hurt a company's growth. The threat of higher interest rates was felt throughout the entire market today, not just tech stocks, as the S&P 500 fell 1.9% this morning.
Making matters worse for Fastly is the fact that some investors have been rotating out of technology stocks this month as bond yield rates have risen. The two-year and 10-year Treasury yields reached nearly two-year highs last week, causing tech stocks to fall.
The rates have since bounced back a bit but are still above their levels at the end of 2021.
Now what
With today's drop, Fastly's share price is down 74% over the past year. Fastly investors can likely expect some more volatility from the company's stock as investors continue to process bond yield rates and the Fed's forthcoming decision about rate hikes.
Additionally, investors will want to pay close attention to Fastly's fourth-quarter and full-year 2021 results, which the company will release on Feb. 16.
