S&P 500 Rallies as Rebound in Tech Continues
Investing.com
Published May 20, 2021 02:05PM ET
Updated May 20, 2021 03:33PM ET
By Yasin Ebrahim
Investing.com – The S&P 500 climbed Thursday as tech continued its rebound from a day earlier, with chips and mega-cap tech stocks leading to the upside.
The S&P 500 rose 1.37%, the Dow Jones Industrial Average gained 0.90%, or 303 points, and the Nasdaq Composite gained 1.96%.
Tech was up more than 1% amid improving investor appetite for growth following weeks of pressure.
Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Microsoft (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) rose more than 1%.
The iShares PHLX Semiconductor ETF (NASDAQ:SOXX) continued to rack up gains, with NVIDIA (NASDAQ:NVDA) and Marvell Technology (NASDAQ:MRVL) among the leaders.
The April Fed minutes released Wednesday showed that fed policymakers were starting to think about broaching the topic of tapering bond purchases at upcoming meetings. But the April meeting arrived before the weak jobs numbers, and that could potentially cool some 'taper talk' among members.
"April payrolls surprised markedly to the downside, and the March print was revised lower, so the view on tapering among FOMC participants, which was conditional on "continued...rapid progress" may have been updated as well," Morgan Stanley (NYSE:MS) said in a note.
But rates are expected to pick-up steam once again, and that could exacerbate the rotation from growth to value as investors sell tech stocks to make room for cyclicals stocks.
"[W]e continue to believe that real rates will rise [...] and as we've seen earlier this year, when real rates rise, growth stocks with extended multiples tend to contract," said David Wagner, portfolio manager at Aptus Capital Advisors, in an interview Thursday with Investing.com. "There appears to be more downside for growth stocks than value right now so I believe that growth will continue to be a source of funds."
"If we continue to see heightened inflation expectations and an increase in the yield curve, we could really see this value run extending for much longer," Wagner added.
Energy, meanwhile, was one of the only sectors in the red, paced by a decline in oil prices as investors continue to fret about an influx of global supply as Iran is close to securing a nuclear deal.
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