With the stock market rising significantly from its low point nearly two months ago, tech stocks appear to be back in vogue after being shunned by investors during the widespread selloff earlier this year, once again leading the market higher as investors snap up shares.
Though investors piled into defensive sectors—such as utilities, consumer staples and healthcare—during the brutal market selloff in the first half of 2022, the broader market has rebounded nearly 15% since its low point on June 16, with shares of Big Tech companies once again leading the charge.
The tech sector has jumped nearly 20% since that time, outpacing much of the rest of the market as investors buy up shares following a better-than-expected earnings season for tech companies.
Tech stocks have also rebounded thanks to market expectations that inflation has peaked—and will continue to moderate, which may lead the Federal Reserve to pare back its aggressive pace of interest-rate hikes.
A stronger-than-expected jobs report last Friday eased recession fears, while inflation cooled in July, rising 8.5% on an annual basis—less than the 8.7% expected by economists and down from 9.1% in June.
Among the best performers in the sector are tech giants like Apple and Amazon, both of which have surged roughly 30% in the last two months, while other big names such as Netflix and Tesla have risen 40% and 37% in that time, respectively .
The second-quarter earnings season has been a “major victory” for tech companies, with spending, cloud software, consumer demand and even digital advertising all proving to be “much better than feared, given the white-knuckle backdrop,” according to Wedbush analyst Dan Ives.