Wall Street: Tech stocks extend rally to lead US markets higher

The major US stock indexes were firmly in the green on Tuesday as Big Tech shares continued to bounce-back from last week’s selloff. 

The Dow Jones Industrial Average was up 0.35 percent at 28,091.45 at noon in New York. The S&P 500 – a gauge for the health of US retirement and college savings reports – was up 0.91 percent, while the tech-heavy Nasdaq Composite Index was up 1.54 percent.  

Shares of Apple were 2.11 percent higher in advance of the tech titan’s virtual product launch, when it is expected to showcase new versions of watches and iPads for the critical holiday shopping season. 

Shares of Apple Inc have risen nearly 56 percent this year alone and the company boasts a $2 trillion stock market valuation. 

Tech stocks are building on a rally that started on Monday after Oracle emerged as the “trusted technology provider” for China’s ByteDance, which faces a September 20th deadline from the White House to either sell TikTok’s US operations or shut them down. Nvidia Corp also announced it plans to acquire chip designer Arm in $40bn mega-deal.

Shares of Oracle were still riding high on Tuesday, trading up 3.11 percent, while Nvidia shares were up 0.57 percent.

Tesla was up 6.0 percent, following last week’s sell-off triggered in part by disappointment that the electric-car maker was snubbed for inclusion in the S&P 500 index. 

Meanwhile, shares of Nikola were down 6.6 percent after Bloomberg News reported that the US securities and exchange commission is examining claims by short-sellers that the electric-vehicle maker misled investors. 

Fed meeting

Investors are turning their attention to the Federal Reserve’s two-day policy meeting that kicks off on Tuesday. On Wednesday, they will learn whether the US central bank will add to its already considerably stimulus measures after talks in Congress stalled for another round of virus relief aid.

Last month, Fed chief Jerome Powell said he was willing to let inflation run higher than the Fed had been willing to tolerate, which could make ultra-low interest rates a feature for years to come. 

Economic news continued to paint a picture of a US recovery that is under way, but slowing.

The Federal Reserve reported on Tuesday that US industrial production rose 0.4 percent in August – its fourth consecutive monthly increase, but gains have plateaued since June. The Empire State manufacturing index, a monthly survey of manufacturers in New York State conducted by New York’s Federal Reserve Bank, confirmed that business activity expanded at a solid clip in September.

“We are vigilant that future progress toward a full recovery in the industrial sector will be slow and uneven as a health solution remains out of reach and fiscal relief fades,” Oren Klachkin, Lead US Economist at Oxford Economics wrote in a Tuesday brief. 

While COVID-19 is likely to sway the market for months to come, there are some bright spots. 

Also on Tuesday, data showed China’s industrial output spiked the most in eight months in August, while the country’s retail sales got a boost for the first time in 2020.