Around noon, all three main indexes had returned from their morning lows, but had turned sharply red. The Dow closed up 1.7%, or more than 500 points, and the S&P closed up 2.4%.
Nevertheless, the Nasdaq rose 30% in 2020, still outperforming its peers.
“Although there is no single driver for weakness, it seems as if investors suddenly realized how overbought stocks sell and are sold. Someone set fire to a crowded theater and everyone left at once,” Ryan Detrick said. , Said a key market strategist. LPL Financial in emailed comments.
But there are also technical reasons for Thursday’s decline: As US-China relations sour, investors are moving from money to technology, which could be the hardest hit by a possible increase in tariffs.
Ed Moya, a senior market analyst at Onda, said the Nasdaq was being hit hard by the continuous rotation in cyclonic locations and the cost of further deterioration in US-China relations would eventually pay off.
Cyclical stocks are also expected to perform well as the economy recovers.
Looking at the summer rally, to see tech stocks improve slightly, it’s “absolutely normal,” Detrick said.
And investors who are still loyal to their safe tech holdings have little reason to be concerned: the director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fawcett told CNN on Thursday that the Covid-19 vaccine remained “unlikely” until October, although it was possible.
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