Tech stocks just had their worst week since the April tariff selloff. Why it’s about time.

After the “Magnificent Seven” and large-cap tech companies pushed the stock market to new highs, it seems like investors are taking a break from tech stocks.

The S&P 500 Information Technology Sector Index XX:SP500.45 ended the first week of November down 4.2%. Tech-sector exchange-traded funds also were down, with the Technology Select Sector SPDR Fund XLK losing around 4.2% for the week.

This is the largest weekly decline since the sector fell a whopping 11.4% the week President Donald Trump announced his “liberation day” tariffs in early April.

While this week’s selloff may hurt some portfolios, especially given the growing market concentration around tech, it’s important to keep things in perspective.

“After tech previously acted as a market laggard — tech was the worst-performing sector from Q3 2024 through Q1 2025 — it’s been a standout leader over the last six months,” Bret Kenwell, U.S. investment analyst at eToro, told MarketWatch. “Even amid the current pullback, tech remains the best-performing S&P 500 sector so far this year.”

Kenwell pointed out that the tech-heavy Nasdaq-100 NDX has rallied for seven consecutive months, gaining almost 60% from its April low to its most recent high.

“Those are some heady gains to digest, even when the backdrop remains healthy,” Kenwell said.

Stocks seem to be doing just that — letting off some steam after a pretty significant rally. And, as Kenwell mentioned, the backdrop remains relatively healthy, which was less the case in April when investors reacted sharply to the threat of sweeping tariffs and what they could have meant for the economy.

Also read: Big Tech drags down S&P 500 amid jitters that stock market is overvalued

Shares of Microsoft Corp. MSFT were down about 4% this week, while Meta Platforms Inc. META shares also shed about 4%. This selloff comes even after both Microsoft and Meta reported recent earnings beats.

Some high-growth tech stocks saw even greater losses, with Palantir Technologies Inc. PLTR dropping over 11% for the week — despite posting its best quarterly earnings ever.

Meanwhile, shares of Nvidia Corp. NVDA were down 7% for the week, ahead of the company’s earnings call on Nov. 19.

“Nvidia has dropped sharply on concerns about AI-related valuations. But it is a popular stock and there will be a lot of demand for it at lower levels,” Fawad Razaqzada, a market analyst at StoneX, told MarketWatch.

Razaqzada pointed out that, even in this week’s tech selloff, some investors were moving in to buy the dip. That seemed to be the case on Friday afternoon, when stocks erased most of their losses seen during early trading. The S&P 500 SPX was down 1.3% at its Friday low, but turned around and ended the day 0.1% higher.

Razaqzada said that he doesn’t anticipate this selloff turning into a larger bear trend. Instead, rich valuations for these tech companies led to a lot of “froth” in the market.

“Once some froth is removed, Nvidia and the like should be able to hold their own and provide support for the wider markets. A correction was both needed and overdue,” Razaqzada said.