S&P500, Nasdaq Rally to Records, Rotation into Tech | ThorFX

15 Jun 2021 · 3rd Party Analysis

S&P500, Nasdaq Rally to Records Amid Rotation into Technology


In Summary

  • Technology and other growth stocks rally on Monday
  • Futures points to an extension of the positive momentum

S&P500, Nasdaq Rally to Records Amid Rotation into Technology

Stocks on Wall Street rose on Monday, continuing their strong performance from the past week. The optimistic outlook for the economy translated into gains for the S&P500 and the Nasdaq Composite, which ended at fresh record highs.

The broad-based S&P500 was hovering near the flatline for the bigger part of the session and only in the final hour of trading, it turned higher to reach a new top. Investors were once again oriented to look for technology bargains and other growth stocks that were shunned in recent months.

Shares of big tech names such as Apple and Netflix advanced more than 2% apiece on Monday. Other high-flying technology stocks, including Tesla, Amazon, and Facebook all gained over 1%, helping the Nasdaq Composite snatch its first record close since April 26.

The tech-focused Nasdaq Composite was pushed to the side for over a month as investors anticipated the economic reopening and shifted their focus on economically sensitive stocks poised to gain from the accelerating recovery. During that time, the Dow Jones Industrial Average and the S&P500 continued their ascent. The blue-chip Dow index has advanced nearly 14% since the start of the year. The S&P500 is higher by 15% for the same period.

Positive Movements for Meme Stocks

The Nasdaq Composite was not fortunate to go through a solid climb and suffered two bouts of steep losses since January. The index dropped 10% in mid-February and recovered, and then tumbled again 8% right after its record close on April 26. The relatively bumpy ride in the Nasdaq Composite still managed to yield a gain of almost 12% year-to-date.

Monday’s rally, however, did not benefit the Dow Jones as an interest to rotate to reopening trades faded. The 30-stock benchmark index ended the session lower by 0.25%, or 85.85 points, to 34,393.75. The S&P500 posted a gain of 0.18%, or 7.71 points, to finish the session with a record at 4,255.15. The tech-centered Nasdaq Composite advanced 0.74%, or 104.72 points, to close at 14,174.14. Equity futures on Tuesday indicate a continuation of yesterday’s gains as all three benchmark indexes are higher in pre-market trading.

Shares in individual meme-stocks were among the winners yesterday. AMC Entertainment popped 15.38% fueled by retail efforts to push the stock higher to reach $60. This time around, the amateur trading army coordinated its approach on Twitter, placing the so-called #AMCDay as the third most popular trend on Twitter on Monday.

AMC stock this year marks an increase of over 2,700% as individuals have piled in to hurt investors who are betting against the stock. For similar reasons, GameStop stock is higher by 1,230% January-to-date.

On the cryptocurrency front, bitcoin has broken over the $40,000 on news that Elon Musk is considering allowing the digital asset to be used as payment if more of the power to mine new coins come from

renewable sources. The news lifted Bitcoin’s price to a two-week high of $41,050 late on Monday as crypto enthusiasts went on another buying wave. Bitcoin is presently trading at levels around $40,500.

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