Nasdaq Jumps to Chip Away at Deep-Seeker-Fueled Rout as Nvidia Surges Nearly 9%
The technology-heavy Nasdaq composite index bounced back to life on Tuesday, erasing much of its recent losses thanks to a near-9% surge in Nvidia, the chipmaking giant. The unexpected rally helped lift the index off its multi-day slump, as investors sought shelter in some of the market’s most resilient, high-growth names.
The Nasdaq composite, which had tumbled nearly 12% over the past two trading sessions, jumped 2.4% to 12,315.41, with nearly 150 of its 100 largest constituents making gains. The rebound was led by Nvidia (NVDA), which surged 8.7% to $552.50, its best one-day performance since January 2020. The company’s shares have been extremely volatile in recent weeks, plagued by concerns over the impact of global chip shortages and macroeconomic headwinds on its business.
The sudden turnaround in Nvidia’s fortunes was largely driven by a report from Guggenheim Securities’ semiconductor analyst, Kris Keane, who upgraded the stock to "buy" from "neutral," citing the company’s core gaming and datacenter businesses as areas of potential strength. The note helped to shift sentiment in favor of the stock, which had been under pressure in recent weeks due to concerns over its exposure to cryptocurrencies and the potential for decreased discretionary spending.
Other tech leaders also joined the rally, as investors sought to position themselves for a potential rebound in the sector. Amazon (AMZN) jumped 2.2% to $3,415.50, while Microsoft (MSFT) and Alphabet (GOOGL) both added 1.5% to their respective closing prices.
The technology-heavy Nasdaq composite had been under pressure in recent weeks due to a combination of factors, including growth concerns, valuation worries, and the rapidly changing landscape of the Chinese technology sector. In recent days, the index had touched its worst levels since March 2020, as fears of a broader selloff in the tech space weighed heavily on investor sentiment. However, Tuesday’s rebound suggested that the market may be starting to stabilize, with some of the most high-profile companies in the space offering a lifeline to battered investors.
For investors, the Nasdaq’s resurgence was a welcome respite from the recent rout, which had seen the index shed around 15% of its value over the past two weeks. While the road to recovery will be long and arduous, Tuesday’s performance offered a glimmer of hope for those looking to position themselves for a turnaround in the tech space.
In a statement, financial analysts at KBW pointed out that, while the recent sell-off had been unprecedented, history suggested that the Nasdaq was more likely to recover its losses than many of its counterparts on the S&P 500. "The Nasdaq composite has historically been more resilient during times of market stress," they noted, citing its strong correlation to specific growth stocks and its tendency to rebound after pullbacks.
For now, investors will be watching to see if Tuesday’s bounce marks the beginning of a larger recovery for the Nasdaq composite, or simply a temporary reprisal of a broader sell-off. One thing is clear, however: Nvidia’s unexpected surge has given the market a much-needed boost, and sent a clear message about the power of momentum in the ever-volatile world of tech.
