The technology sector has shown immense upside potential this month even amid market turmoil, ruffled by fears of inflation and higher-than-expected rate hikes due to an upbeat January jobs data and Fed minutes.

Now the remarks from the Fed Chairman Jerome Powell in its first testimony to Congress revived fears of more interest rate increases this year leading to another bloodbath in the stock market. Powell showed enough confidence in the economic and inflation outlook, signaling that the Fed could accelerate its pace of monetary tightening with four interest rate hikes this year rather than the three penciled in to keep the economy from overheating.

All these events pushed the S&P 500 and Dow Jones into the red territory for the month declining about 5% each. Meanwhile, the Nasdaq Composite Index shed a bit lower with a 4.2% decline driven by the strong tech stock fundamentals.

This is especially true as the tech sector appears fully emerged from the burst of the dot-com bubble. The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, and artificial intelligence (AI) as well as strong corporate earnings are acting as the key catalysts.

Additionally, the twin tailwinds of Trump’s tax reform plan and a rising interest rate scenario are pushing the stocks higher. This is because tech titans hoard huge cash overseas and are poised to benefit the most from the reduced tax rates. Most of the tech companies are sitting on a huge cash pile and are in a position to increase payouts to their shareholders. The cash reserves will ensure that these companies are not plagued by financial trouble in a rising interest rate environment.

Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to economically sensitive growth sectors like technology, which typically perform well in a maturing economic cycle. With the global economy gathering momentum, technology companies are likely to outperform and are less susceptible to interest rates or deregulation.

Given this, we have highlighted several ETFs and stocks from this sector that have easily led the way higher in the month and will likely continue to do so if the trends persist.

SPDR S&P Internet ETF (XWEB - Free Report)

This product targets the Internet corner of the broad tech space with an equal-weight exposure.

Zacks Rank: #3 (Hold)

AUM: $3.8 million
Expense Ratio: 0.35%
February Return: 4.7%

First Trust NASDAQ Cybersecurity ETF (CIBR - Free Report)

This fund measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors.

Zacks Rank: NA
AUM: $441.3 million
Expense Ratio: 0.60%
February Return: 3.7%

SPDR FactSet Innovative Technology ETF (XITK - Free Report)

This fund seeks to provide exposure to the most innovative companies with high revenue growth across the technology sector and other industries that deal with technology, such as electronic media.

Zacks Rank: NA
AUM: $8.8 million
Expense Ratio: 0.45%
February Return: 2.7%

Global X Social Media Index ETF (SOCL - Free Report)

This is a pure play ETF in the global social media space.

Zacks Rank: #3
AUM: $208.2 million
Expense Ratio: 0.65%
February Return: 2.3%

iShares North American Tech-Software ETF (IGV - Free Report)

This ETF provides exposure to the software segment of the broader U.S. technology space.

Zacks Rank: #2 (Buy)
AUM: $1.3 billion
Expense Ratio: 0.48%
February Return: 1.2%

eGain Corporation (EGAN - Free Report)

eGain Corporation provides customer engagement solutions and offers web customer interaction applications, social customer interaction applications and contact center applications.  

Zacks Rank: #3
VGM Style Score: C
Market Cap: $126.63 million
February Return: 57.4%

Infinera Corporation (INFN - Free Report)

Infinera provides Digital Optical Networking systems to telecommunications carriers, cable operators and other service providers worldwide.

Zacks Rank: #3
VGM Style Score: F
Market Cap: $1.01 billion
February Return: 53.1%

Computer Task Group Incorporated (CTG - Free Report)

Computer Task Group provides information technology (IT) staffing, IT solutions and application management outsourcing services in North America and Europe.

Zacks Rank: #3
VGM Style Score: A
Market Cap: $77.61 million
February Return: 50%

QuinStreet Inc. (QNST - Free Report)

QuinStreet is a provider of online direct marketing and media services. The company offers online messaging, email broadcasting, search engine marketing and brand management services. 

Zacks Rank: #2 (Buy)
VGM Style Score: B
Market Cap: $401.37 million
February Return: 40.6%

ACM Research Inc. (ACMR - Free Report)

Acm Research develops, manufactures and sells single-wafer wet cleaning equipment for enhancing the manufacturing process and yield for integrated chips worldwide.

Zacks Rank: #3
VGM Style Score: D
Market Cap: $71.66 million
February Return: 32.1%