🔒 Tech stocks snap back strongly – With insights from The Wall Street Journal

At the same time, a selloff in government bonds paused for the first time in five sessions. The yield on the 10-year Treasurys ticked lower to 1.545% on Tuesday. It had ended the previous day at 1.594%, the highest level in more than a year.

The stabilization in bond markets helped tech shares recoup some of their losses, investors said. Money managers expect many companies in the sector to continue to benefit from increased online shopping and at-home access to media, entertainment and computing options even as Covid-19 lockdowns ease.

“It is this buy-the-dip mentality,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management. “It’s not like we’ve changed our long-term view on tech. Everyone expects it to do well—it was just really expensive.”

The Nasdaq rose 464.66 points, or 3.7%, to 13073.82, its largest one-day percentage gain since Nov. 4. The rally shaved the index’s decline from its Feb. 12 high to 7.2%.

The S&P 500 added 54.09 points, or 1.4%, to 3875.44. And the Dow Jones Industrial Average added 30.30 points, or 0.1%, to 31832.74, after rising more than 300 points earlier in the session. The blue-chip index is off just 0.4% from its record set last month.

The buy-the-dip mentality had been largely absent during a broader rotation out of growth stocks and into shares of companies better positioned to benefit from an economic upswing. But opportunistic buying has been a reliable constant during previous episodes of stock-market pullbacks, as with the dizzying climb stocks mounted after last March’s slide.

On Tuesday, that buying translated into massive gains that cut the recent losses suffered by some stocks in as much as half. Helping the market’s overall mood were signs that lawmakers remain on track to pass the latest version of the $1.9 trillion coronavirus stimulus package later this week.

But some investors say the big gains likely won’t translate into an end of the volatility. Too many questions remain, from whether the additional stimulus Congress plans to inject into the economy will lead to inflation to concerns that high-growth stocks like Tesla remain expensive.

“There will be heightened volatility as long as the path of inflation remains as uncertain as it is,” said Jase Auby, chief investment officer for the Teacher Retirement System of Texas. Mr. Auby said the pension fund’s stock allocation is currently tilted toward value stocks, or shares of companies more likely to benefit in a reflationary environment.

For now, investors appeared to be putting those concerns on hold.

Tesla shares led the S&P 500, rising $110.58, or 20%, to $673.58, cutting the electric car maker’s loss over the past month to about 21%. Roku shares added $33.92, or 10%, to $361.11, while Square gained $23.22, or 12%, to $225.09.

Big tech stocks also rallied. Apple shares rose $4.72, or 4.1%, to $121.09, Amazon added $110.90, or 3.8%, to $3,062.85 and Facebook gained $10.43, or 4.1%, to $265.74.

Several of those stock are featured in ARK Investment Management’s five popular exchange-traded funds, all of which rose more than 7%. The gains helped stem a wave of losses that, at one point, had knocked the five actively managed funds down more than 20% from their recent highs.

Meme stocks rallied, too. Shares in GameStop gained $52.40, or 27%, to $246.90 as shares climbed for a second day after the board tapped Chewy co-founder Ryan Cohen to lead a committee dedicated to transforming the retailer. AMC Entertainment added $1.21, or 13%, to $10.50.

Much of the stock market had tracked higher with technology stocks throughout Tuesday’s trading session. But as the session wore on, investors appeared to pull back from sectors that had been main beneficiaries of the reflation trade, including financials, industrials and energy stocks.

Some investors now expect that bond markets could calm as appetite for U.S. government debt revives following the sharp rise in yields. The 10-year Treasury yield was as low as 0.915% near the start of the year.

“We think a big part of the bond-yield move has played out,” said Hani Redha, a portfolio manager at PineBridge Investments. “At this level of yields, we do expect additional buyers to come in. That tends to stabilize the yield level.”

Overseas, the pan-continental Stoxx Europe 600 ticked up 0.8%. In Asia, major indexes were mixed. The Shanghai Composite dropped 1.8%, and South Korea’s Kospi declined 0.7%. Japan’s Nikkei 225 advanced 1%.

Appeared in the March 10, 2021, print edition as ‘Tech Stocks Stage Rebound.’