Update: The Nasdaq Composite is up 4.45% and SaaS and cloud shares are up 6.7%. Whatever prompted the rally this morning seemed to still be at it in the early afternoon.
Based on the significant gains announced yesterday, technology stocks are once again rising sharply in pre-market trading today. The tech-heavy Nasdaq Composite Index futures are showing a 3.4% gain this morning, well ahead of the 1.7% gain that the broader S&P 500 is currently predicting.
The market capitalization of some of the world̵7;s most valuable companies added tens of billions of dollars this morning, with Apple 3.9% increase in pre-market transactions and Microsoft 4.4% richer.
Smaller key players in the tech market are also on the rise, with Salesforce a 2.9% increase over the bell and Twilio adds 3.3% to its value.
The prices of heavily traded assets have spiked over the past 24 hours, with US government debt yields falling last night – suggesting that investors are optimistic about the economy as a whole – before bounce back when there is clearly no so-called Blue Wave forming. The prospect of a divided Congress could hinder future economic stimulus, a possibility that has been a major driver of market trading in recent months.
Exactly why tech stocks soared higher this morning is not entirely clear. One clear possibility is that investors are returning to their summer trading, as they place the prices of shares of software-heavy companies higher in hopes of depositing their wealth into companies. The company has the best chance of steady growth during times of economic uncertainty.
If a divided Congress entails more stimulus, why not go back to a play that had worked before?
For tech and tech aid companies hoping to list shares before the end of the year or in early 2021, the rally is welcome news. But, like everything in this election, things can change.