April 6, 2022: -On Monday, Stocks gained as traders shook off recession fears and bought technology shares that were beaten up in the first quarter.
The Dow Jones Industrial Average traded 103.61 points, or 0.3%, higher to close at 34,921.88, and the S&P 500 gained 0.81% to 4,582.64, with both benchmarks gaining for the second session in a row.
But the Nasdaq Composite was the big outperformer, which advanced 1.9% to 14,532.55. The tech-heavy index was once in bear market territory earlier in the year but has clawed its way back to be down just about 10% from its previous record.
Tech shares, which were among the hardest-hit sectors in the first quarter, surged on Monday after one social media stock got a major endorsement from a notable entrepreneur and investor, Elon Musk.
Twitter shares increased over 27% following news that Musk purchased a 9.2% passive stake in the company. It was the biggest pop in Twitter’s history since its IPO as investors speculated Musk’s move could lead to a buyout or other significant changes, even if the stake is passive.
Musk’s main stock also had a big day. Tesla shares gained 5.6% on the back of its latest quarterly electric vehicle delivery figures on Saturday, which came in above the year-earlier period.
Technology companies, including Apple, Amazon, Alphabet, and Nvidia, were also up over 2%. U.S.-listed Chinese tech stocks, including Alibaba and JD.com, also rallied.
“Again, because tech took it on the chin in the first quarter, it ends up being a relief rally for tech and the other growth-oriented sectors,” said Sam Stovall, CFRA chief investment strategist. “The Nasdaq is leading the way really because there’s not a lot of new news to put additional pressure on the Nasdaq.”
Investors shook off a few lingering concerns as they bought tech shares. A vital Section of the yield curve remained inverted after the 2-year, and 10-year Treasury yields shifted for the first time since 2019 Thursday evening. The 5-year note yield is also trading above its 30-year counterpart.
“It likely means that the shot clock to a potential recession has started,” said Ryan Detrick of LPL Financial. “The good news can take upwards of a couple of years potentially for a recession to take hold.”
Meanwhile, oil increased, with WTI crude jumping more than 4% and back above $100 a barrel, while Brent crude rose nearly 3%, raising investor concerns about a possible recession.
Oil’s gains came as investors continued to monitor developments in Ukraine. German Chancellor Olaf Scholz said Sunday that Western nations would impose additional sanctions on Russia in the coming days.