The Nasdaq Composite is up over 2.5% Thursday in afternoon trading as technology stocks including Facebook parent Meta Platforms, iPhone maker Apple, and Windows maker Microsoft post gains on low volume trading and an improving economic outlook.
In an interview with FOX Business, David Russell, VP of market intelligence at TradeStation, said, “Sentiment has remained negative all quarter, but investors are looking for a little year-end cheer today.”
“History favors Santa Rallies, especially when volumes are light and there’s no major news to trigger selloffs,” he continued. “Many of the big growth stocks have erased most, or all of their pandemic gains as investors begin bottom-fishing and looking for laggards to bounce in January, which is another common seasonal pattern.”
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Shares of technology bellwethers have been hard hit after announcing layoffs or hiring freezes.
Apple, Meta and Twitter are among the companies either implementing hiring freezes or letting workers go as rising interest rates fuel fears of an economic slowdown or recession.
Apple has reportedly instituted a hiring freeze for many jobs outside of research and development as it tries to reduce budgets next year.
Microsoft laid off employees in October on expectations of slowing growth due to weakness in the PC market.
Meta Platforms was expected to begin large-scale layoffs last month, while Twitter—which is no longer publicly traded—laid off half its workforce to trim costs following its $44 billion purchase by Elon Musk.
TradeStation’s Russell also pointed to Thursday’s unemployment numbers are a reason for optimism.
“The rise in jobless claims has offered some economic relief to help ease interest rate fears,” Russell added.
Data compiled by the U.S. Labor Department on Thursday showed workers receiving benefits is at its highest level since February, suggesting the Fed’s interest-rate hike strategy is beginning to stall economic growth and inflation.
Year-to-date, the tech-heavy Nasdaq benchmark remains approximately 33% beneath the redline, still outperforming the Nasdaq-100 Technology Sector index. That’s down almost 40%.
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Megan Henney contributed to this report.