S&P 500 Eyes Record as Tech Fuels Biggest Rally Since March

S&P 500 Eyes Record as Tech Fuels Biggest Rally Since March
© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 delivered its biggest one-day rally since March on Tuesday,  as a record run in Apple and strong gains in Intel triggered a rally in tech to help the broader market set its sights on record highs once again.   

The S&P 500 rose 2%, and now is just about 1% below its all-time highs, the Dow Jones Industrial Average gained 1.4%, or 492 points, the NASDAQ climbed 3%.

Tech jumped 4% as Apple (NASDAQ:AAPL) soared to a record high after Morgan Stanley hiked its price target on tech giant to $200 from $164.

Apple’s foray into new product categories including augmented reality and virtual reality, which will bolster its valuation, aren’t yet priced into its shares, according to Morgan Stanley.

Chip stocks were also in favor, underpinned by a surge in Intel (NASDAQ:INTC) as the chipmaker detailed plans to take Mobileye, its self-driving car business, public in 2022. Reports suggest the self-driving car business could fetch a valuation of about $50 billion, but some on Wall Street said that may be somewhat optimistic.

“We do struggle somewhat to understand why Mobileye (F:0ME) should command a $50B valuation,” Wedbush said in a note.

While the move is a positive for Intel, the transaction isn’t expected to change the company’s broader trajectory as its “struggles to maintain share in its core operations,” Wedbush added.

Sentiment on tech was also strengthened by a melt-up in cloud-related stocks following a 20% rally in MongoDB (NASDAQ:MDB) as the database reported a narrower than expected loss.

Amazon (NASDAQ:AMZN), meanwhile, held the bulk of its gains as the e-commerce behemoth said it had identified the cause of problems with its cloud services that caused outages across the internet, including Disney Plus, and Netflix.

Cyclicals corners of the market such as energy and financials racked up gains as investors cheered positive updates on Omicron.

The new variant is “almost certainly not more severe than the Delta [variant],” Dr. Anthony Fauci, President Joe Biden\’s chief medical adviser said Tuesday.

In another positive development, GlaxoSmithKline (NYSE:GSK) said its monoclonal antibodies treatment was effective against the heavily mutated Omicron variant. Pfizer (NYSE:PFE), meanwhile, was up 1% after data from South Africa indicated the company\’s vaccine provided partial protection against the omicron variant, Bloomberg reported.  

Energy followed oil prices higher as positive updates on Omicron and expectations that supply of Iranian crude isn’t likely “anytime soon” amid considerable differences on nuclear talks between the U.S. and Iran, Commerzbank said in a note.

Tesla (NASDAQ:TSLA) jumped more than 4% after UBS upgraded its price target on the stock to $1,000 from $725, citing the electric automaker as a \”undisputed leader.\” 

Crypto-related stocks including Coinbase Global (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA), and Riot Blockchain (NASDAQ:RIOT) were pushed sharply higher by a rebound in bitcoin following its recent malaise.  

On the political front, Republican Senate Minority Leader Mitch McConnell reportedly said he reached a deal with Democratic Senate Majority Leader Chuck Schumer on the debt ceiling, paving a way for Democrats to raise the limit in a procedural vote, Bloomberg reported.

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