Nasdaq Ends At Record High As Big Tech Roars Back

The Nasdaq ended at a record high on Tuesday, lifted by Amazon, Microsoft and other top-shelf tech companies as investors shifted their focus to growth stocks.

Microsoft’s stock market value breached $2 trillion for the first time, while Apple, Facebook and Amazon also rallied.

Amazon had over $5.6 billion in total online sales in the United States on the first day of its Prime promotional event, according to Adobe Digital Economy Index.

In a congressional hearing, meanwhile, Federal Reserve Chair Jerome Powell reaffirmed the U.S. central bank’s intent to encourage a “broad and inclusive” recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation.

So-called value stocks, expected to benefit from the economic recovery, have outperformed in 2021, while growth stocks, including major tech names like Apple and Nvidia, have rallied since the Fed last week took a stance on future rate hikes viewed by many as more aggressive than expected.

The S&P growth index has added around 2% since before the Fed last Wednesday projected an accelerated timetable for interest rate increases, compared with a drop of more than 1% in the value index.

“The market was caught off guard regarding the Fed’s hawkish commentary, and that’s 100% of what is happening,” said Andrew Mies, chief investment officer of 6 Meridian. “All the smart people were surprised about how hawkish the Fed was, and now they are adjusting their portfolios.”

Most of the 11 major S&P sector indexes rose, with consumer discretionary and energy among the biggest gainers.

(Graphic: S&P 500 sectors YTD, https://fingfx.thomsonreuters.com/gfx/mkt/oakvebdxapr/Pasted%20image%201624375167038.png)

Unofficially, the Dow Jones Industrial Average rose 0.2% to end at 33,945.71 points, while the S&P 500 gained 0.51% to 4,246.46. The Nasdaq Composite climbed 0.79% to 14,253.27.

Cryptocurrency exchange Coinbase Global fell as bitcoin slipped below $30,000 for the first time since January, briefly wiping out gains for the year.

GameStop jumped after the videogame retailer said it raised over $1 billion in its latest share offering, cashing in further on this year’s Reddit-driven surge in its stock price.

Sanderson Farms rallied to a record high after J.P. Morgan raised its price target on the stock after a source told Reuters that the poultry producer was exploring a sale.

Moderna Inc rose after the European Union decided to take up an option under a supply contract with the drugmaker that allows the bloc to order 150 million additional COVID-19 vaccines.

Splunk Inc surged after the data analytics software maker said private equity firm Silver Lake invested $1 billion in the company’s convertible senior notes.

(Additional reporting by Devik Jain, Sujata Rao-Coverley and Medha Singh in Bengaluru; Editing by Maju Samuel, Sonya Hepinstall and Dan Grebler)

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