Shares of large technology companies have been punished far more than shares of large industrial companies in the recent Wall Street sell-off. The tech-heavy NASDAQ has lost 14.8% year-to-date compared to 4.4% for the Dow Jones Industrial Average.

The performance of the equities of the two sectors seems to contradict the performance of the underlying companies’ earnings and investors may be selling the wrong stocks.

Technology companies have been reporting positive earnings surprises thus far in the reporting season underway, in sharp contrast with industrial companies that have been reporting mostly negative profit surprises, according to a recent FactSet report, which keeps a close tally on the earnings reports of publicly traded companies.

“Positive earnings surprises reported by companies in the Information Technology sector, partially offset by a negative surprise reported by a company in the Industrials sector, were mainly responsible for the improvement in overall earnings for the index during the past week,” said John Butters, author of the FactSet report. “Positive earnings surprises reported by companies in the Information Technology and Financials sectors have been the top contributors to the overall increase in earnings for the index since the end of the fourth quarter. On the other hand, a negative surprise reported by a company in the Industrials sector has been the top detractor to the overall increase in earnings for the index since the end of the fourth quarter.”

There’s a reason for the sharp divergence in the earnings reports of the two sectors. The large tech sector consists of companies with a near-monopoly position like Microsoft and Apple that have a great deal of pricing power, meaning that they can pass on any hikes in wages and material prices to their customers, though materials are a small part, if any, of the overall costs.

Microsoft and Apple have reported earnings that beat analyst estimates last week.

That isn’t the case with industrial companies that do not enjoy the same market position like the tech giants, and therefore, they cannot pass the rising costs of materials, which account for a big part of their cost, and wages onto their customers.

While it’s still too early to determine how the earnings reporting season will end, there are good reasons to believe that the gap in the earnings performance of the two sectors may become worse in a rising-interest-rate business environment. Rising interest rates end up squeezing industrial companies on both the top and the bottom lines.

On the top line, due to a slowdown in spending for interest-sensitive industrial products like appliances, and on the bottom line, due to the higher borrowing costs for heavily leveraged industrial companies.

Trading equities with emotions like fear and greed, reacting to headline news, is never a good substitute for due diligence.

Investors should be always reminded of what Warren Buffett has stated so clearly: “You will continue to suffer if you have an emotional reaction to everything that is said to you. True power is sitting back and observing things with logic. True power is restraint. If words control you that means everyone else can control you. Breathe and allow things to pass.”