NEW YORK- US technology and growth stocks have taken the market’s reins in recent weeks, pausing a rotation into value shares as investors assess the trajectory of bond yields and upcoming earnings reports.
Technology has been the top-performing S&P 500 sector in April, rising 8 percent versus a 5 percent rise for the benchmark index. Big tech-related growth stocks in other S&P 500 sectors such as Amazon Inc, Tesla Inc and Google-parent Alphabet Inc have also charged higher.
The gains have followed a months-long rotation in which tech stocks were outpaced by shares of banks, energy companies and other economically-sensitive names that have surged since breakthroughs in COVID-19 vaccines late last year.
The increases in many of these so-called value stocks have slowed lately, while US Treasury prices have come galloping back in April after a sharp first-quarter sell-off. This suggests that some investors may have already priced in a rapid growth spurt that is showing up in economic data.
“Tech and growth has started to pick up a little bit because people are getting a little more cautious,” said Lindsey Bell, chief investment strategist at Ally Invest. “Investors are in this wait-and-see mode … at least until earnings get underway.”
One of the key drivers of the move in tech has been the Treasury market, with the benchmark 10-year note yield falling about 15 basis points in April to about 1.6 percent on Friday.
