Banks are hot in 2022 rotation, while tech stocks could be in bubble

Technology stocks are out of favor, while previously shunned bank shares are popular again, as a persistent jump in bond yields is turning markets upside down this year.

Overweight positions on bank stocks rose to 41% among BofA's clients, closing in on a record set in October 2017.

The stampede out of tech continued on Tuesday, with futures contracts on the $NASDAQ 100 Index (.NDX.US)$ falling as much as 2.1% while yields on U.S. 10-year Treasury notes hit a two-year high of 1.85%. The tech-heavy Nasdaq is now down 4.3% this year, while the KBW Bank Index of U.S. lenders has jumped 11%.