After a brutal pullback over the last few days, stocks and index ETFs shot up on Wednesday as tech shares fought to gain back some of the severe losses that drove the Nasdaq Composite into correction territory.
The Dow Jones Industrial Average jumped 500 points higher, or 1.8%, while the S&P 500 popped 2.1% and the beaten down Nasdaq Composite rocketed 3.11%.
The major stock index ETFs are rebounding Wednesday along with their underlying benchmarks, with the SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) all advancing. The iShares Core S&P 500 ETF (IVV) added over 2% Wednesday as well.
The Nasdaq was aided by Tesla, which had its single worst day ever on Tuesday, where the electric carmaker plummeted 21%. Tesla rallied 6.7% Wednesday, followed by Apple, which also had steep losses in the prior session, but rebounded 5% Wednesday.
Analysts appear more jaded on tech however, as those two stocks, along with the majority of the FAANG cohort, relinquished $1 trillion in market value over just the last few days. Valuations also ballooned out of control
“The megacap Tech stocks are no longer invincible,” Tom Lee, head of research at Fundstrat Global Advisors, wrote in a note. “The bludgeoning seen in the last few days resulted in sharp pullbacks for these stocks.”
“Some are suggesting this is the start of another dramatic sell-off, similar to the spring of 2000 when the ‘tech bubble’ burst. I highly doubt that,” Kristina Hooper, chief global market strategist at Invesco, said in an email to CNBC. “I think of this rout not so much as a correction, but as a digestion given that the Nasdaq Composite rose more than 60% from its March bottom in the course of less than six months. All in all, I think this is a healthy