Nasdaq was up by 2% when trading closed on Wednesday, thanks to investors placing their faith back in technology stocks following the latest surge in COVID-19 cases.
With analysts closely monitoring the race for a Coronavirus vaccine, investors turned away from economically-sensitive sectors in favor of backing technology stocks, particularly due to a large volume of stocks in this sector that continued to perform respectably during the Coronavirus lockdowns.
While Nasdaq fell consistently over Monday and Tuesday, the index was kept afloat by “stay-at-home” stocks such as Microsoft and Netflix, both of which rose by approximately 2%. This was also the case with Amazon.com Inc and Apple Inc, with each of them enjoying a rise of over 3%.
The temporary decline of technology stocks can largely be attributed to the promising late-stage coronavirus vaccine trial data that was released on Monday. This encouraged investors to focus more on stocks that perform excessively well coming out of a recession, such as energy, industrials, and materials.
According to Shawn Snyder, who heads the Investment Strategy department at Citi Personal Wealth Management, this type of cycle might persist until the spring. He further elaborated by explaining: “There’s still really strong earnings for these technology companies and you’re still facing a potential surge in Covid cases through the winter months and renewed restrictions and lockdowns.”
