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The stock market remained upbeat on Tuesday as Fed Chairman Jerome Powell restored confidence among investors assuring the central bank’s support to the economy. Tech stocks continued to remain in charge of the market pullback.
The stock market turned positive on Tuesday, September 22, after staying under pressure for the last four-five trading sessions, S&P 500 (INDEXSP: .INX) ended its losing streak by surging 1% by the day end. The tech-heavy Nasdaq (INDEXNASDAQ: .IXIC) also climbed 1.7% closing at 10,963.64.. The Dow Jones Industrial Average (INDEXDJX: .DJI) managed to stay afloat with a 0.5% positive closing at 27,288.18 levels.
Traders regained confidence after Federal Reserve Chairman Jerome Powell talked about the central bank’s commitment to supporting the economy. The rising cases of coronavirus have continued to cast a shadow over the global economy. Global markets have been under pressure as the United Kingdom is considering another round of nation-wide lockdown. On the other hand, the uncertainty over the next round of fiscal stimulus made markets jittery.
Powell’s statement on Tuesday has brought some relief to investors and traders. He said:
“We remain committed to using our tools to do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy”.
He also added that the economic activity has improved, however, there’s a long way for a full-blown recovery to pre-COVID levels. The Fed Chairman added:
“Economic activity has picked up from its depressed second-quarter level, when much of the economy was shut down to stem the spread of the virus. Many economic indicators show marked improvement,” he said. “Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.”
Tech Stocks Lead the Market Once Again and Push S&P 500 Higher
Well, tech stocks continue to lead the markets once again. On Tuesday, e-commerce giant Amazon.com Inc (NASDAQ: AMZN) jumped 5.69% going back above $3000. At Tuesday closing, AMZN share was trading at a price of $3128. Investors fled to buying AMZN shares after Bernstein analyst Mark Shmulik updated the target for the company.
Bernstein updated Amazon’s rating to ‘outperform’ from ‘market perform’. The analyst is confident that e-commerce will continue to maintain its dominant position in the market. Apart from its e-commerce business, Bernstein is also positive about the company’s growing cloud computing and advertisement business.
Amazon has already been the market leader for 2020 with its share gaining over 50% year-to-date. With the coronavirus lockdowns, the company saw a massive surge in its revenue during Q2 2020.
On Tuesday, other tech companies also participated in the rally. Both Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) gained around 2%. After its failed deal for acquiring TikTok, Microsoft announced a $7.5 billion buyout deal for ZeniMax Media. With this single deal, Microsoft gets direct access to all of the popular Fallout franchise.
Facebook Inc (NASDAQ: FB) also gained 2.6% on Tuesday despite the company’s recent fight with European regulators over data sharing matters.