Nasdaq jumps 3.7%, most in nearly a year
Technology companies powered stocks higher on Wall Street Tuesday, driving the Nasdaq to its biggest gain in nearly a year and more than making up for a sharp skid a day earlier.
The Nasdaq surged 3.7%, led by gains in Big Tech companies such as Apple, Amazon and Facebook. Despite its big day, the index remains 7.2% below its all-time high set Feb. 12. On Monday, it closed 10% below its peak, what is known as a “correction” on Wall Street.
The tech stocks rally, which helped lift the S&P 500 1.4%, followed a decline in bond yields, which have been increasing rapidly in recent weeks, driving up long-term interest rates. The yield on the 10-year Treasury note dropped to 1.54% after trading above 1.60% a day earlier.
Higher bond yields tend to pull money away from highpriced stocks like technology companies, which have been soaring through the pandemic and, as a result, have been beaten down in recent weeks as bond yields have marched higher.
“The yields being down took a little of the pressure off the tech stocks,” said Willie Delwiche, investment strategist at All Star Charts. “There’s still beneath the surface a buy-the-dip mentality and a belief that largecap growth (stocks) are going to be a persistent leader in the market.”
The S&P 500 rose 54.09 points to 3,875.44. Communication companies and those that rely on consumer spending also helped lift the benchmark index, while financial, energy and industrial stocks lagged the broader market.
The Dow Jones Industrial Average, which is weighted less toward tech than the other two indexes, rose 30.30 points, or 0.1%, to 31,832.74. The Nasdaq gained 464.66 points to 13,073.82.
Smaller companies also had a good day. The Russell 2000 index of small company stocks added 42.07 points, or 1.9%, to 2,245.06. The index is blowing away the rest of the major indexes this year, with a gain of nearly 14%. The S&P 500 is up 3.2%, while the Nasdaq is up 1.4%, reflecting the pullback in tech stocks in recent weeks.