Jefferies cools on tech stocks because of higher rates

Traders work on the floor of the New York Stock Exchange.

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A top Wall Street small cap analyst is advising clients to stay away from technology stocks as a more optimistic economic outlook should push rates higher.

Jefferies downgraded the small-cap technology sector to underweight from market weight on Monday. The firm cited higher interest rates and a steeper yield curve, which should boost more economically sensitive parts of the small-cap group.

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