Nasdaq had a huge day Tuesday, gaining roughly 4% to help rebound from big losses.
The reason for the uptick is because U.S. bond yields fell, which opened the door for the technology stocks that had been beaten up to get scooped up by investors.
Microsoft had their highest single-day gain in over a month. Same thing with amazon.com.
It was the biggest rise on a single day for the Nasdaq since November 4.
The rollercoaster ride the markets are taking investors on are also caused ty the new level in interest rates, Katrina Hooper, the chief global market strategist at Invesco told Reuters.
“Today the 10-year is down a bit, and that takes pressure off valuations, so tech is performing well,” she said. “The market is just about getting comfortable at this level of rates.”
Telsa went up 19.6%, the largest gainer percentage wise on the Nasdaq and S&P.
On Wednesday, after the best day in four months, the Nasdaq looked like some of those gains from Tuesday would be given back, as analysts indicated it was a one-day event.
In a Yahoo Finance report, the director of strategy at Optimal Capital, Frances Newton Stacy said the tech rally Tuesday may have only been what’s called a “cat bounce.”
“Well, you had a net short position in the Nasdaq to the tune of about 20,000 contracts. It was a crowded trade. So anyway, that was always going to be a rebound. It’s very important for the Nasdaq to hold 12,500 here. This may be sort of a dead cat bounce if investors are still concerned about yields, or it could be a story of, ‘let’s get back into a rational discussion around yields,’ given the fact that 1.5% historically isn’t high, though I would say it’s 1.5% on a record amount of money supply.”