Tech Stocks Stable Despite Market Weakness: Which Sectors Outperform at End of September 2026

While broad market indices came under pressure on September 29, 2026, the technology sector shows relative strength. The S&P 500 lost 0.17 percent on that day, closing at 7,670.84 points, and the DAX fell 0.23 percent to 25,445.5 points. The Technology Select Sector SPDR ETF (XLK), meanwhile, moved in a narrow range between 193.96 and 196.14 USD on September 29 and closed at 194.50 USD, essentially unchanged (minus 0.02 percent).

XLK as a Barometer for US Tech Performance

The Technology Select Sector SPDR ETF has tracked the Technology Select Sector Index since its inception on December 16, 1998. This index comprises all technology companies in the S&P 500 classified according to the Global Industry Classification Standard (GICS) in areas such as technology hardware, storage and peripherals, software, communications equipment, semiconductors and semiconductor equipment, IT services, and electronic equipment, instruments and components. The ETF thus gives investors concentrated exposure to one of the eleven economic sectors of the S&P 500.

On September 28, 2026, XLK closed at 194.53 USD following a closing price of 196.27 USD on the previous trading day, September 25, according to data from Investing.com. This represents a daily loss of 0.89 percent. On September 29, the ETF remained essentially flat at 194.50 USD, while the major indices declined slightly.

Valuation Levels Remain Demanding

According to Robinhood data from July 6, 2026, XLK has a price-to-earnings ratio of 36.54 – well above the historical average of the broader market. The dividend yield stands at a meager 0.46 percent, which is typical for growth-oriented technology companies that reinvest profits rather than distribute them.

This high valuation reflects expectations of sustained strong earnings growth. At the same time, it makes the sector vulnerable to revaluations if the macroeconomic environment or interest rate outlook changes.

Volatility Throughout 2026

The technology sector went through different phases in 2026. A report from 24/7 Wall St. on February 18, 2026, documented that XLK declined 3.06 percent by mid-February, while the S&P 500 remained flat in the same period. This underperformance pointed to a rotation away from highly valued growth stocks – a pattern that regularly appears in phases of rising interest rates or increased risk aversion.

The same report noted that XLK had previously outperformed the S&P 500 by 35 percentage points, illustrating the extreme volatility of sector-specific investments. Concentrated positions in a single economic sector can bring both disproportionate gains and sharper setbacks.

Market Breadth as an Indicator

The slight weakness of major indices on September 29 – NASDAQ Composite minus 0.09 percent at 26,797.54 points – shows that market breadth remains mixed. While the technology sector remains relatively stable, there is a lack of broad momentum across all sectors.

For investors in the DACH region, this means: those investing in US technology stocks via ETFs such as XLK must keep an eye not only on sector performance but also on currency risk. A strong US dollar can reduce returns for euro or franc-based investors, while a weak dollar can enhance them.

Outlook Toward Quarter-End

With the close of trading on September 30, 2026, the third quarter ends. Investors are awaiting quarterly reports from major technology companies, typically published in October. These figures should show whether the high valuations are justified by corresponding revenue and earnings growth.

The relatively narrow trading range of XLK at quarter-end suggests that market participants are positioned cautiously ahead of these releases. Larger moves are likely to follow once it becomes clearer whether the tech giants will meet or disappoint their growth forecasts.