Nasdaq Composite Climbs to a Record Boosted by Tech Rally

27 Apr 2021 · 3rd Party Analysis

WRITTEN BY ThorFX

In Summary

  • Nasdaq Composite climbs to a new all-time high, its 13th for the year
  • Investors expect a full slate of tech giants to report their results this week

Nasdaq Composite Climbs to a Record Boosted by Tech Rally

The Nasdaq Composite and the S&P500 closed in the green yesterday, while the Dow Jones Industrial Average lagged and couldn’t make it into positive territory. The tech-focused Nasdaq Composite rallied on Monday and set a new all-time high, rising above its February record. The new high was boosted by investors’ optimism over the corporate earnings reports. The earnings season this week is defined by the heavyweight large-cap tech companies set to reveal their financial figures for the first quarter.

The Nasdaq Composite index advanced 121.97 points, or 0.87%, to finish the session at an all-time high of 14,138.78 points. Yesterday’s top was the 13th record close for the index in 2021 and it arrived two months after the previous one.

The S&P500 ticked up only 7.45 points or 0.18%. The modest gain, however, was enough for the broad-based index to set a new record of 4,187.62 points. For the index, the new top was the 24th of the year. The Dow Jones Industrial Average declined moderately by 61.91 points, or 0.18%, to end the day at 33,981.57. The blue-chip index remains only 0.6%, or about 180 points, below its record high reached in April.

The tech sector, which was largely out of favor during the first trimester of the year, is trying to stage a comeback in April as investors are figuring out which sectors will perform well in a post-pandemic recovery. The high-flying tech stocks so far have justified their lofty valuations. The latest example, Tesla, already revealed its financial results for the first quarter. The EV maker posted its strongest-ever quarterly net income of $438mn, while revenue spiked 74% to $10.39bn, or 93 cents a share.

Investors Eagerly Await Big Tech Reports

This week brings the financial results of more than one-third of the companies in the S&P500. Investors are monitoring to see if stocks like Microsoft, Apple, Facebook, Amazon, and Google’s parent Alphabet will live up to the high expectations placed on them for the first quarter.

Today, Microsoft and Alphabet report their earnings. Apple follows on Wednesday alongside Facebook, and Thursday is reserved for the e-commerce and cloud-computing giant Amazon. Other large corporations that report first-quarter results this week include Boeing, Exxon Mobil, Ford Motor, and Mastercard.

Globally, stocks have been jittery in the past few days after India reported a record number of daily coronavirus cases. The overwhelming wave of infections in India threatens to extend the global pandemic as the country’s healthcare system crumbles under the pressure. To prevent a broader spread of new variant infections, both the EU and the US have said they will step in and provide much-needed medical aid to India.

Despite progress on vaccinations, the worsening situation in India and some other countries, including Japan and Brazil, triggered concerns about the pace of the global economic recovery.

Investors on Tuesday appear to have shrugged off pandemic worries as the earnings season is at its peak. Futures contracts tied to the benchmark indexes point to a higher opening. All three major indexes rose by over 0.10% each in pre-market trading on Tuesday

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