Marketbites: Tech Stocks Lead Turnaround
Portfolio Manager Commentary:
Stocks rose across the board yesterday, as strong gains in tech helped the Nasdaq rebound after a downturn Tuesday. Big tech companies such as Meta, Amazon, Netflix, and Apple all gained more than 1%. Sentiment was also lifted by easing concerns around the state of the banking sector. Regional banks rose broadly, with the SPDR S&P Regional Banking ETF (KRE) advancing more than 1%. Big banks such as Citigroup and Goldman Sachs also advanced.
Some semiconductor companies also performed well Wednesday. Chipmaker Micron saw its shares climb more than 5% after posting 2nd-quarter figures. Comments from executives explaining that inventory issues are improving caused the rally. Other semiconductor companies like Nvidia and AMD saw a gain of more than 1%.
The benchmark 10-yearTreasury yield fell to 3.6%, and the short-term 2-year rate climbed to 4.08%. Those declines come a day after both yields advanced, putting pressure on the broader stock market.
Chart of the Day:
Semiconductor companies seeking federal grants under the Chips Act may face a tough decision: either take D.C.'s help to expand in the U.S., or preserve their ability to expand in China. The Biden administration last week proposed new rules detailing restrictions chip companies would face on operations in China and other countries of concern if the companies accept taxpayer funding. Some of the proposed restrictions, known as the China guardrails, were tougher than industry executives, lawyers, and national security analysts had expected -- both for leading-edge semiconductor plants needed for advanced military weapons systems as well as factories making so-called legacy chips used in consumer electronics. “It’s going to make a good number of companies question whether they want to accept the Chips funding,” said Angela Styles, an Akin Gump lawyer who advises semiconductor-industry companies.