The Nasdaq 100 has surged by $3.5 trillion over the last four days, culminating in a 3.3% rally on Tuesday, bringing the tech-heavy index to 29,733, within 3% of its June 3 record. This rebound follows a more than 10% intraday decline last Wednesday. This bullish activity, marked by a rush to cover shorts and buy upside call options, has been described as one of the top ten most bullish days for the Nasdaq 100 in the past decade, according to Nations Indexes.
Several factors contributed to this rally. Treasury yields fell, and crude oil dropped below $80 after President Trump hinted at a potential deal with Iran. Additionally, second-quarter S&P earnings are on track for 47% growth, the largest since 2021, and the forward 12-month price-to-earnings ratio is 19.6, below the five-year average. While memory stocks led the rebound, materials and industrial stocks also saw gains, with the Invesco Equal-Weight S&P 500 ETF (RSP) adding 1.4%.
Despite the overall positive market sentiment, some individual tech stocks showed mixed performance. Nvidia Corp. gained in premarket trading following a sharp increase in monthly sales reported by a key partner, indicating sustained demand for AI infrastructure. Arista Networks Inc. jumped 14% after forecasting better-than-expected third-quarter revenue. However, SpaceX fell over 10% in premarket trading due to higher-than-expected AI business spending projections, and Advanced Micro Devices Inc. dropped about 8% after an underwhelming sales outlook.
