The NASDAQ Composite Index closed above 16,000 for the first time last week. This marked the second consecutive best-ever close for the stock exchange and it comes amid fears that the Covid-19 pandemic could strike back over the winter months.
Many of the best performers in the NASDAQ were technology stocks, whereas the blue chip companies that power the Dow Jones suffered as a result of losing market confidence in how some European nations were reintroducing lockdown measures in a bid to stave off the virus.
It was a great week for the NASDAQ that was up 1.2% and a welcome return to form after declines the previous week. Although the stock exchange was back down to 15,854 at the time of this report, the overall trend is positive towards tech stocks.
For example, a recent financial report from Zoom beat quarterly revenue estimates with a 35% revenue growth which then led to a 6.4% rise in share price. The video conferencing platform has successfully managed to release new products targeting those who are returning to schools, colleges and offices.
While some tech companies may have suffered a slowdown in revenue growth since the easing of pandemic restrictions, the most enterprising brands like Zoom have found ways to ensure that their products stay relevant.
FAANG stocks (Meta, Amazon, Apple, Alphabet and Netflix) in particular enjoyed a real return to form, while the Nvidia chipmaker stock price rose by just over 4%. Other good performers included Innoviz Technologies that saw a 25% rise, while Aurora Innovation added 13%. Both of these companies are heavily linked with Apple’s electric car project that was recently rumored to be launching in 2025.
Other key features of the tech resurgence included Alphabet hitting the $2 trillion market cap valuation mark. The impressive rise of the NASDAQ stock exchange is also thought to be helped by the Federal Reserve keeping interest rates low while the employment market enjoyed improved figures this fall.
Pandemic concerns hit the market
While the NASDAQ enjoyed a strong week, other sectors were hard hit by fears that the pandemic could return. Several European nations such as Austria have reintroduced some form of lockdown measures in a bid to halt rising case numbers, and there are real fears that such restrictions may have to be introduced in the US.
As such, there was a marked drop in the energy markets as crude prices fell as a result of a lowering in expected demand. The S&P energy index reflected this with a fall of 3.9% across the week, while banking stocks fell by 1.6%. Such negative patterns were echoed across the travel industry with major airlines such as Delta, United and American all reporting drops in their share prices.
However, it wasn’t all bad news as the retail sector appears to be set for a good festive season. With strengthening consumer spending, it looks like there could be mixed fortunes ahead on what is sure to be another unpredictable festive season.