Nasdaq rebounds 1% after biggest drop since 2020 as Microsoft leads comeback
U.S. stocks rose Wednesday a day after the Nasdaq Composite posted a new low for the year, as the market attempted to recover from April’s technology-led sell-off.
The Nasdaq Composite ticked up 1.4%, a day after its biggest daily loss since September 2020. The Dow Jones Industrial Average rose about 270 points, or 0.8%. The S&P 500 gained 1.1%.
Technology stocks rallied Wednesday, with Microsoft leading the comeback after strong earnings results. Microsoft’s shares jumped more than 3% after a better-than-expected quarterly report and optimistic forward revenue guidance.
“We’re trying to find a place of stability,” Kari Firestone, chairman and CEO of Aureus Asset Management, told CNBC’s “Squawk Box.” “We need to see a few more names come in with really strong, reliable and sustainable earnings so investors can get back on board.”
Facebook parent Meta is set to report earnings Wednesday after the bell, with Apple and Amazon reporting earnings Thursday. Investors will be watching to see if tech companies’ results prove the intense selling in April has been misplaced.
Tesla, which was the Nasdaq’s biggest laggard the day prior, added 4%. Salesforce rose more than 2%. Apple and Amazon added 1%.
Shares of Chinese companies also bounced back, dominating the Nasdaq’s leaderboard. Pinduoduo and JD.com both jumped more than 9%. Baidu gained more than 4%.
On the downside, Google parent Alphabet’s earnings results missed consensus estimates. Management warned on the conference call of another potentially weak quarter ahead. Alphabet shares fell about 4%.
Boeing also saw shares drop more than 8% after an earnings miss.
Meanwhile, shares of Robinhood shed about 3% on Wednesday after the retail brokerage said it is cutting back on staff. The company cited “duplicate roles and job functions” after its rapid expansion last year.
The tech-heavy Nasdaq Composite is attempting to claw out of bear market territory, sitting now roughly 22% below its high. The S&P 500 is more than 12% off its record and closed below a key support level of 4200.
In April, the S&P 500 is down about 7%. The Nasdaq has lost about 11%. The Dow has declined more than 3%.
“The confluence of persistent inflation, Fed tightening, the war in Ukraine, and China’s zero-Covid policy lockdowns has manifested in tenacious headwinds for investors in April,” Art Hogan, National Securities chief market strategist, said.