The market moved higher on Wednesday, as tech stocks recovered some of the losses that pushed the Nasdaq into correction territory a day earlier.
The Dow Jones Industrial Average was up 1.9%, over 500 points, on Wednesday, while the S&P 500 rose 2.1% and the tech-heavy Nasdaq Composite gained 2.6%.
Tech stocks rebounded somewhat, a day after the Nasdaq fell into correction territory, with shares of Microsoft, Amazon, Facebook and Google-parent Alphabet all moving higher.
Tesla’s stock, which had its worst day ever on Tuesday—falling 21% after being snubbed from the S&P 500 index, rose over 5% on Wednesday.
Shares of Apple, which fell 14% in the previous three sessions, also rebounded on Wednesday, gaining over 3%.
Investors also shrugged off a setback with AstraZeneca and Oxford’s late-stage coronavirus vaccine, which has now been put on hold due to a patient in the U.K. coming down with a mysterious illness.
Despite both companies reporting better-than-expected corporate earnings, shares of athletic retailer Lululemon and workplace messaging platform Slack fell more than 7% and 14%, respectively.
Wednesday’s rally is “simply a bounce from oversold conditions… but investors shouldn’t anticipate a V-shaped move right back to the highs,” says Vital Knowledge founder Adam Crisafulli. “If anything, sentiment around tech isn’t conducive to forming a sustainable bottom with most people asking when (not if) the group should be bought… as a result, bounces right now should be sold, not chased.”
The tech sell-off which started last week continued on Tuesday, dragging the market lower as investors once again rotated out of hot Nasdaq stocks. Following the sharp losses, the Nasdaq officially entered correction territory, falling 10% in just three days of trading. Investors first began rotating out of tech stocks last Thursday, causing stocks to retreat from record highs as the market posted its worst day since June, with the Dow falling more than 800 points, the S&P 500 losing more than 3% and the Nasdaq more than 5%. Before the sell-off that started last week, stocks had made a strong start to September, despite it being a historically bad month for markets.
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