Technology shares lifted major indexes Wednesday, retaking the lead from the cyclical shares that had rallied in recent days on promising vaccine news.
The S&P 500 rose 0.8%, led by its information-technology sector, as of the 4 p.m. close of trading in New York. The tech-heavy Nasdaq Composite climbed 2%, a reversal after two days in the red, with the help of heavily weighted big tech stocks. Amazon.com shares advanced 3.2%, and Microsoft rallied 2.6%.
The Dow Jones Industrial Average lost 0.1%, or about 21 points. The blue chips briefly rose above their all-time closing high from February in early trading before dropping back.
The megacap tech stocks that have powered markets higher in 2020 took a hit earlier this week as progress toward a Covid-19 vaccine prompted investors to begin rotating into cyclical sectors such as manufacturing and energy. The energy and financial groups are the S&P 500’s top performers so far this week, though both are in negative territory for 2020. The technology sector, by contrast, is slightly negative for the week but is the leading sector in the S&P 500 year-to-date.
“Today we’ve got a little bit of a rebound in the technology trade,” said Mike Stritch, chief investment officer at BMO Wealth Management. “It’s back to the growth story today, but I think the bigger trend is one of an expected rotation into some of these more underperforming sectors and regions.”