The Nasdaq is recovering from yesterday’s downturn
Yesterday, the Nasdaq, a stock index heavily impacted by major tech company performance, faced a significant drop of about 2.4%. This dip caused the index to close more than 10% lower than its previous peak in February, entering into correction territory. The decline was primarily driven by a general decrease in the value of tech stocks. Companies like Apple and Microsoft witnessed price increases, leading to revised lower profit forecasts.
Following the decrease in stock values, investors engaged by purchasing shares, resulting in a recovery this morning. Tech giants such as Apple, Microsoft, Amazon, and Netflix saw a gradual resurgence of at least 3% in their stock value. Additionally, Tesla, after experiencing substantial losses over a five-day period, rebounded by 8.4%. Consequently, the Nasdaq regained 3.4% in value, while the Dow increased by 0.7% and the S&P 500 by 1.7%.
Miller Tabak’s chief market strategist, Matt Maley, stated, “A lot of these tech stocks have become oversold on a short-term basis. Therefore, it’s not a big surprise that they’re seeing a nice bounce. The question will be whether this bounce is a strong one…or a ‘dead cat bounce’ that doesn’t last very long at all.”
The Nasdaq surges 2.7% at the open https://t.co/yl4IevlHVY pic.twitter.com/tNnbVGb5lj
— Bloomberg (@business) March 9, 2021
Tech stocks have been on a downward trend for about a month now, with pandemic-era investments like Zoom and Peloton experiencing significant declines of 20% each. These reductions are likely influenced by hopes for an economic recovery following the confirmation of the latest COVID-19 stimulus package and the ongoing distribution of vaccines.
“Right now the market is broadening out and we think in an underlying sense the bull market is strengthening and that will play to our benefit over the longer term,” stated Cathie Wood of Ark Investment Management in an interview with CNBC.
