By
Godfrey Benjamin
April 18th, 2024
The US stock rallied for the second consecutive day as Wall Street investors shrugged off the fears of the Omicron Covid variant. Tech stocks gained heavily on Tuesday.
In what can be termed as a profound recovery after the last week’s sell-off, the US stocks market rallied for the second consecutive day this week, Wall Street investors remained less fearful about the economic impact of the Omicron Covid variant.
The Dow Jones Industrial Average (INDEXDJX: .DJI) gained nearly 500 points up 1.40% and closed at 35,719 levels. Similarly, the S&P 500 (INDEXSP: .INX) surged 2% gaining nearly 100 points and closing at 4686 levels.
The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) rallied a solid 3% up 461 points and closed at 15,686.92 levels. It has been one of the best days for the indices since March this year.
Wall Street This Week
As investors shook off the Covid fears, tech stocks were once again in a relief rally mode. Investors seem to be actively buying the dips since earlier this year. Apple Inc shares (NASDAQ: AAPL) gained a sharp 3.54% after analysts at Morgan Stanley increased the price target to $200.
As of Tuesday’s closing, Apple stocks were trading at $171 with its market cap at $2.81 trillion. Morgan Stanley’s Katy Huberty has increased the iPhone shipment forecast by three million units. This is a 4% increase year-over-year. Huberty believes that the supply constraints for Apple are easing off since the September quarter. Besides, the analyst also expects App Store revenue to outperform the initial estimates.
Chipmakers like Intel (NASDAQ: INTC) also rallied 3%. This happened as Intel announced that its self-driving car unit, Mobileye, will head for a public listing in mid-2022. Other players in the segment also posed a strong rally.
Nvidia Corporation (NASDAQ: NVDA) surged 7.9%, Micron Technology Inc (NASDAQ: MU) added 4.1% while Marvel gained more than 7%. Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN) added 2% each, Meta Platforms (NASDAQ: FB) surged by 1.5%, Adobe Inc (NASDAQ: ADBE) gained 4.4%.
Experts Opinion on the Impact of Omicron Covid Variant
Last Friday, investors moved money out of the tech stocks on Covid-related fears. However, it seems that the fear is currently short-lived. Some market analysts also called last week’s sell-off an over-reaction. However, Craig Erlam, senior market analyst at OANDA has urged for cautious optimism.
“Time will tell whether investors are getting ahead of themselves but a couple of days without a negative omicron headline has the dip buyers flooding back in. Given the concern among global leaders and various organizations over the last couple of weeks, I struggle to see all of the updates being as positive which makes more two-way price action a strong possibility,” Erlam added. “A Santa rally may be underway but it will be a bumpy ride.”
Wall Street investors are betting that the new Covid variant might have a milder impact than anticipated. On Tuesday, energy stocks also moved higher along with oil prices amid the outlook of the surge in global oil demand.
The market remains wary of the Fed’s actions as the U.S. central bank start plugging its pandemic easy policies. All eyes are currently on the Fed meeting next week. Some Fed officials said that the central bank might decide to double the pace of its taper to $30 billion a month. Also, the market will have a close watch on the inflation data coming next week.