Tech stocks recover after an awful December
December was horrible for technology stocks. The tech-rich NASDAQ Composite fell 9.5%, and as of December 24, the index had fallen ~23% since October 3. However, the index has since rebounded by 19.1%, demonstrating tech stocks’ resilience. The bounceback was driven by the tech sector’s earnings beating investors’ expectations, which were low due to worries of a global economic slowdown.
What was behind the rally
Although the NASDAQ has recovered thanks to hopes of US-China trade negotiations and the Fed’s dovish stance, uncertainties regarding US-China trade and global economic growth remain, and tech sector valuation multiples have stayed high. After the dust from the earnings season settles, market volatility may resume.