The NASDAQ Composite Index is headed for another weekly gain
The tech-heavy NASDAQ Composite Index (QQQ) is on track to post its 12th weekly gain in 13 weeks. The index rebounded 3.8% in the week that ended on March 15. It edged up 0.07% on March 20, marking its fourth straight session of gains.
The index was boosted on March 20 by solid gains in Netflix (NFLX), Alphabet (GOOG), Amazon (AMZN), and Facebook (FB), which all saw rises of over 2%. Meanwhile, Apple stock rose 0.87%. In early trading on March 21, the index was up 1.07%.
Fed’s dovish tone
Meanwhile, the S&P 500 Index (SPY) fell 0.3% on March 20 after the Federal Reserve signaled that it wouldn’t be raising rates for the rest of the year.
While the Fed’s dovish stance in December propped up tumbling stocks, the markets construed its latest decision as a signal of a slowdown in economic growth.
Additionally, the Fed said that it would slow the winding down of its bloated balance sheet in May and stop selling its Treasury holdings by September as a result of the headwinds the economy is facing.
However, as we mentioned above, tech stocks have outperformed the broader markets, and they continue to defy gravity. The NASDAQ Composite Index is up 17.4% year-to-date and is at a five-month high.
The recent rally has come despite several headwinds in the tech sector, including high valuations, a bleak economic and earnings outlook, and uncertainty surrounding the US-China trade war.