Tech stocks performance
Last month, most of the US tech stocks underperformed the broader market by a wide margin. In May, the S&P 500 Index fell 6.6%. Among tech stocks, NVIDIA (NVDA), Apple (AAPL), Qualcomm (QCOM), Google (GOOGL), Intel (INTC), and Micron (MU) lost 25.2%, 12.8%, 22.4%, 7.7%, 13.7%, and 22.5%, respectively.
Recovery in the first week of June
In the first week of June, these companies saw a sharp recovery. On June 4, Fed Chairman Jerome Powell hinted towards a near-term rate cut. In the first week of June, Apple, NVIDIA, Qualcomm, Intel, Advanced Micro Devices (AMD), and Micron rose 8.6%, 7.4%, 2.8%, 4.5%, 18.2%, and 4.2%, respectively.
In the first week of June, Apple held its annual worldwide developer conference, which boosted investors’ confidence. Read Did Apple’s Worldwide Developers Conference Inspire Confidence? to learn more.
In the second week of June, some tech stocks’ recovery ran out of steam. Other tech stocks turned negative. The market’s focus shifted back to the US-China trade war.
Apple and Intel rose 1.4% and 0.3%, respectively, in the second week of June. NVIDIA, Advanced Micro Devices, and Micron fell 0.6%, 6.3%, and 3.9%, respectively. Qualcomm stock remained unchanged in the week ending June 14.
What to watch this week
The Federal Open Market Committee’s June meeting is scheduled to start on June 18. The Fed will likely announce its final decision on interest rates on June 19. If the Fed decides to cut the interest rate immediately, it could boost investors’ sentiments.
Unless there’s a negative update about another escalation in the US-China trade war, the expected rate cut decision could trigger market-wide buying, including in tech stocks, in the near term.