Tech recovery underpins Wall Street’s biggest gain since January
Major technology stocks clawed back some of their heavy declines from the previous session and a fierce multi-day rally in Treasuries ended amid a rebound that led the broader US stock market to its biggest one-day gain since the start of the year.
Building momentum for the tech giants handed the Nasdaq Composite its largest one-day gain in five months and helped pull the tech-heavy index out of a technical correction, after Monday’s sell-off left it down just over 10 per cent from its peak close in early May.
Alphabet, Facebook, Amazon and Apple shed a combined $133bn on Monday after US antitrust enforcers agreed oversight of the companies that paves the way for investigations into their competitive behaviours.
Tim Cook, Apple’s chief executive, responding to reporters’ questions, said he welcomed any government scrutiny, but insisted the company was not a monopoly.
“[W]ith size, I think scrutiny is fair. I think we should be scrutinised,” he said in an interview with CBS News following the company’s annual Worldwide Developers Conference on Monday.
“But if you look at our — any kind of measure about is Apple a monopoly or not, I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly. Our share is much more modest. We don’t have a dominant position in any market,” Mr Cook said.
Major tech stocks had a mixed start in early trade this morning, but found themselves on more solid ground as the session wore on and after Jay Powell, Federal Reserve chairman, assured markets the central bank would “act as appropriate” to sustain the US’s economic expansion.
Alphabet, Google’s parent, finished 1.5 per cent higher, following a 6.1 per cent drop in the previous session that had it closing on the verge of a bear market, which is defined as a 20 per cent drop from a peak.
Apple was up 3.7 per cent, more than recouping Monday’s decline. Facebook overcame early declines to be 2 per cent higher following on from a 7.5 per cent tumble in the previous session, while Amazon added 2.2 per cent after a 4.6 per cent drop yesterday.
The Nasdaq Composite rose 2.7 per cent for its largest advance since January 4, leaving it down 7.8 per cent from its May 3 record-high close. The broader S&P 500 was up 2.1 per cent for its biggest rise since early January.
The Philadelphia semiconductor index advanced 4.2 per cent on Tuesday. Gains for the index, which tracks 30 companies that design, distribute and manufacture chips, had been led in the previous session by Advanced Micro Devices after it announced a partnership with Samsung.
The whippy trading over recent sessions has come against a backdrop of continued uncertainty around the US’s trade war with its allies and intensifying debate about the speed and direction of the Federal Reserve’s monetary policy. Mr Powell said in a speech on Tuesday morning the central bank would keeps an eye on the impact of the escalating trade war between Washington and its allies, which some analysts interpreted as a willingness to cut interest rates.