The stock market is undergoing a rousing recovery in market breadth, with investors expectantly surveying the relative performance of the ten-year-old tech stock monster Nvidia (NVDA) and the tech-heavy exchange-traded fund (ETF) PowerShares QQQ (QQQ). The country’s ongoing economic recovery is fueling what could be a continued shift in market sentiment as investors turn their attention away from the more defensive asset – primarily companies in the energy sector.
The S&P 500 has risen a steady 5%, and the tech-heavy Nasdaq Composite has surged over 10%. NVDA has led the charge higher, skyrocketing over 25%. The tech powerhouse boasts impressive returns, fueled by demand for its artificial intelligence and graphic-processing technology from internet of things (IoT) to autonomous vehicles.
Although the NDAQ has managed to add 36% of its losses since the pandemic started in mid-March, investors continue to eye NVDA for a better understanding of the tech sector’s performance. The company reports first-quarter earnings after the market close tomorrow; investors will be closely evaluating the firm’s earnings and overall performance. NVDA has gained back 95% of its losses since it hit its trough in mid-March.
QQQ, which is considered a ‘mood gauge’ of the tech sector’s performance, also sounds the alarm when the tech sector begins to unwind. In this sense, many market watchers will keep a close eye on the ETF ahead of tomorrow’s earnings. In addition to a number of technology stocks that compose a majority of its portfolio, the ETF also contains a handful of energy stocks, which are similarly on the rise as the economy continues to reopen.
As investors continue to evaluate these two bellwethers ahead of tomorrow’s earnings, attention has also shifted to the market’s energy subsectors. Crude oil has risen nearly 70% since late April, boosted by the supply-demand imbalance in the energy markets. As the Biden Administration works to get the U.S. economy back online, investors will gauging the impact of the recovery on crude oil prices.
The stock market is undergoing a chaotic recovery in market breadth, and investors are examining the relative performance of NVDA and QQQ with a greater lens. The tech sector has been the major driving force behind the markets, while energy companies have moved in lockstep with the continued reopening of the country’s economy. Gravity of market sentiment hangs precariously on both NVDA’s earnings as well as crude oil’s reaction to the Biden’s Administration’s efforts in reviving the economy. Investors are looking to see which sector will bear the brunt of the markets’ sentiment in the near-term.
