Technology stocks in the US plummeted with news of tighter monetary policies coming into play soon. After the US Fed signaled the likelihood of three interest rate hikes next year, the Bank of England became the latest major central bank to announce a repo rate increase from 0.1% to 0.25%. The NASDAQ slid by 2.5% in midweek trading, with the Dow ending Thursday’s trading slightly in the red. Shares of some major technology and software companies dipped, with Apple (AAPL) shares falling by 4%, and Adobe's (ADBE) stock tumbling by 10%. Investors started to move toward cyclical stocks in the energy and financial sectors, which performed strongly on Thursday. What does this mean for me? Higher interest rates signal an increase in the cost of borrowing, which, added to the tapering of asset purchases by many central banks, is expected to suck liquidity out of markets. The looming lower-liquidity environment is expected to continue to weigh heavily on technology stocks. Tech stocks are known as growth stocks, valued for their future earnings potential. In times of tight monetary policy, investors prefer to invest stocks with a greater likelihood of a short-term return, such as cyclical financial and energy stocks. For stock traders, now is the time to carefully assess your portfolio. As central banks pull different levers of their economies, opportunities could arise. Simply observing what seasoned investors are doing could give you clues about how to adapt these strategies to your own portfolio.