For most of February, the story in the markets was simple: big tech companies kept beating earnings estimates, and stocks kept climbing. That streak broke this week.

It started with a comment from a Federal Reserve official suggesting rate cuts "shouldn't be assumed" for the rest of the year. That single line undid weeks of optimism. The Nasdaq Composite fell 2.8% over three trading sessions, its worst stretch since October.

Here's the mechanism, in plain terms: higher interest rates make it more expensive for growth companies to borrow money, and they also make "safer" investments like bonds relatively more attractive compared to riskier stocks. Tech companies, many of which are valued based on profits investors expect years from now, are especially sensitive to this. When rates are expected to stay higher for longer, those future profits are worth less in today's dollars — so the stock price comes down.

None of the underlying earnings news was actually bad. Cloud computing revenue was up across the board, and two of the three "hyperscalers" that report this month beat Wall Street's expectations. But in this case, one sentence about monetary policy mattered more than a quarter of strong results.

The takeaway for us: it's a useful reminder that stock prices aren't just a scorecard for how a company is doing — they're also a bet on interest rates, inflation, and what the Fed does next. A company can have a great quarter and still see its stock fall.