CNBC reports that according to Barclays Wealth Chief Investment Officer Will Hobbs, U.S. tech megastocks spearheaded a global market sell-off in September, and a key underlying factor could have been a move higher in real interest rates, 

Hobbs suggested that a move higher in real interest rates, particularly in the U.S., had coincided with the sharp downturn for Silicon Valley.

“One of the theories around the current context for markets is that a lot of it is quite dependent on ever-lower real interest rates, because if you think about the valuation of some of these tech titans, think about the shape of their cash flows, they’re sort of like long-duration bonds,” Hobbs said, adding that investors could to some extent project cash flows like annuity revenues.

He argued that much of the popularity of tech growth stocks, those which generate substantial and consistent cash flows while increasing earnings and revenue at a greater pace than their peers, was down to the fact that real interest rates had been steadily falling in recent years.

Although the conditions for a sustainable rise in real interest rates are not present yet, Hobbs suggested that a move higher should not be ruled out given the unprecedented policy environment created by central banks around the world.