Tech stocks push the Nasdaq index up
Nasdaq index jumped by 3% in early trading on Tuesday, gaining 379 points to 12,988.
Some of the major tech stocks clawed back following recent downward spirals. Tesla is up by 9.11%, while Apple and Amazon are up by 3.63% and 3.54% respectively. Nio, the New York-listed electric vehicle manufacturer, made an 11.9% gain to round off an excellent start to the morning for tech stocks.
The news comes in the wake of mass sell-offs of tech stocks in recent weeks which brought doubt over the sector, and growth stocks more generally.
Russ Mould, investment director at AJ Bell, noted a recent shift by investors towards value stocks.
NASDAQ Composite slid into correction territory, just over 10% below its mid-February closing peak, to once more raise the issue of whether investors are now preferring ‘value’ stocks – which potentially offer rapid growth today – over ‘growth’ names, which are usually seen as offering increases in profits and cash flows well into the future,” said Mould.
However, as US bond yields fell back, investors returned to the deflated technology stocks, reversing a recent trend of moving towards value stocks.
10-year Treasury bond yields slid back to 1.54% after edging towards a 13-month high of 1.613% yesterday.
Rising bond yields have put pressure on the stock market in recent weeks, in particular tech stocks.
“Tech stocks are overdue for some kind of bounce after the downfall they have had so far with most investor maintaining a positive outlook on tech stocks in the medium to longer term,” said Michael Sheldon, chief investment officer at RDM Financial in Westport, Connecticut.
“Potential headwind for the market is if interest rates rise further from this point over the short period … since they have risen too fast in too little time.”
