IXIC: Nasdaq Composite Stages 1% Relief Rally as Traders Rush Back to Tech on Discount

Stocks rebounded broadly after their worst day since 2022 as bargain-hungry investors found deals in every sector.

• The Nasdaq Composite IXIC switched to buy mode on Tuesday after its worst day in nearly two years ravaged the technology space. The tech-heavy Wall Street average shot higher by 1%, partially offsetting a Monday loss of 3.5%. Still, bargain-hungry investors scooped up shares on discount — chip giant Nvidia NVDA added 4% after it got slammed with a 6.3% loss a day earlier. EV maker Tesla TSLA jumped 0.9%.
• The fairly moderate rebound came as traders tried to defend the already lofty valuation of technology mainstays even as fears over AI keep mounting. Some analysts doubt whether all the investments in AI could convert to higher revenue and a juicier bottom line. What’s more, Tuesday’s glow-up trifled with the overarching narrative where the Fed may be driving the economy into recession.
• The cold jobs figure for July fanned worries that the US central bank may have missed its chance to lower interest rates without tilting the labor market into a downturn. Against that backdrop, the other two major indexes also posted comfortable gains on Tuesday. The S&P 500 added 1% to erase some of the Monday loss. The Dow Jones Industrial Average jumped 0.8%. Futures contracts were up by 0.7% or more.