Tech Sector Has Bad Day, Leaving Stocks Mixed

By:
Chris Gaetano
Published Date:
May 27, 2020
Investors today seemed to be shying away from tech stocks, although they have been spending heartily in other sectors, leaving today's indices with mixed results.

As of 1:05 p.m., the Dow Jones Industrial Average had gained 264 points, while the S&P 500 had nudged up 13 points. The tech-heavy Nasdaq, on the other hand, had shed about 38 points at the same time.

Bloomberg noted that much of today's action seems to be driven by optimism about the reopening economy, pointing out that the stocks that did best were the ones that, just a few months ago, were doing the worst. Cruise company Carnival Corp. and United Airlines, for example, have been among the market's top performers for two days in a row now. The downward pressure on tech stocks, meanwhile, comes not only from investors anticipating that people will want to go outside, but also from rising tensions between the United States and China, which has adversely affected the microchip industry.

CNN noted that while the stock market has been on a weeks-long rally, the bond market has been rather dismal. The differences between the two, it said, can indicate different perceptions of where the economy is going. The stock market rally indicates that traders believe a recovery will be rapid, especially once a vaccine is released. Bond markets on the other hand are gearing up for a long period of low yields that likely won't end until central banks cease their buying programs, meant to prop up credit markets and ease liquidity.

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