Global Markets Rebound as Tech Stocks Soar
The world’s largest technology companies surged on Tuesday, rebounding from a selloff that sent shockwaves through global markets. The move comes ahead of the start of the megacap earnings season and the Federal Reserve rate decision.
Equities Rebound
Equities rebounded, with the S&P 500 up 1% and the Nasdaq 100 rising 1.8%. Nvidia Corp. rallied 7.8%, following its largest value loss in history. Microsoft is in talks to acquire the US arm of ByteDance’s TikTok, according to President Donald Trump, who made the announcement on Monday night. The shares were up 2% on Tuesday. The bounce in the tech space also reduced the search for haven assets, with bonds seeing small losses.
Calmer Markets
The relative sense of calm on Wall Street comes after a rough start to the week on concern that a cheap artificial intelligence model from Chinese startup DeepSeek could make valuations of the technology that has powered the bull market tough to justify.
Expert Insights
"Was it a bit unnerving? Yes, for some. Should you panic? Not at all," said Kenny Polcari of SlateStone Wealth. "If you talk to anyone that bought stock yesterday, they loved the opportunity to buy some of these names at a deep discount. In the end, no matter how this plays out, competition is good. And remember, you get what you pay for."
Earnings Season Ahead
Now the big-tech reporting period that kicks off Wednesday will be a key test for bulls. While earnings from the so-called Magnificent Seven behemoths are still rising – and far outpacing the rest of the market – the group’s profit growth is projected to come in at the slowest pace in almost two years.
Fed Meeting
As the Fed’s two-day meeting began, investors have accepted that officials probably won’t be cutting rates this time. But they’re looking for any signal from Chair Jerome Powell on which way inflation is going. A survey conducted by 22V Research shows 67% of respondents expect the reaction to the Fed Wednesday to be "mixed/negligible," 21% said "risk-off," and 12% "risk-on."
Market Outlook
A gauge of the Magnificent Seven megacaps climbed 2.9%. The Dow Jones Industrial Average gained 0.3%. Boeing rose 1.1% as its chief is optimistic the company can return to a key production target for its 737 airliner this year.
Conclusion
The world’s largest technology companies have rebounded from a selloff that sent shockwaves through global markets. As the megacap earnings season kicks off and the Federal Reserve rate decision looms, investors will be looking for any signals on the direction of inflation and interest rates.
FAQs
Q: What happened in the tech space?
A: The world’s largest technology companies rebounded on Tuesday, with the S&P 500 up 1% and the Nasdaq 100 rising 1.8%.
Q: What is the outlook for the Fed’s rate decision?
A: Investors have accepted that officials probably won’t be cutting rates this time, but they’re looking for any signal from Chair Jerome Powell on which way inflation is going.
Q: What is the outlook for the megacap earnings season?
A: Earnings from the so-called Magnificent Seven behemoths are still rising – and far outpacing the rest of the market – but the group’s profit growth is projected to come in at the slowest pace in almost two years.
Q: What is the outlook for the US economy?
A: The strong US fundamental story of strong growth, elevated inflation, and a more hawkish Fed continues to favor higher US yields and a stronger dollar.
