Safe bet: tech rally resumes and drives the S&P 500 to a record high

The S&P 500 hit an all-time high at the end of trading on Ma. 13, thanks to technology stocks, while the rest of the market was falling, CNBC writes. The Nasdaq Composite also reached an all-time high. Investors' concerns about high inflation, caused by rising energy prices due to the war with Iran, pressured the market. Against this background, traders were looking for a safe harbor, which was the technology sector.

- On May 13, the S&P 500 broad market index rose 0.6% to a new all-time high.

- The Nasdaq Composite Technology Sector Index jumped 1.2%, also hitting a record.

- The blue-chip index Dow Jones Industrial Average fell 0.1%.

- The Russell 2000 index of small and mid-capitalization companies added about 0.2%.

- Brent crude oil futures fell 1.8% to below $106, while WTI traded at $101 a barrel.

Technology stocks performed better than the rest of the market on Ma. 13: Nvidia securities rose by 2.3%, Micron Technology - by 4.8%, Tesla rose by 3.3%. The VanEck Semiconductor ETF added 2%. The PHLX Semiconductor Index on Wednesday ended trading at its 31st record high this year, MarketWatch calculated.

At the same time, about two-thirds of companies in the S&P 500 declined in market value at the end of the session, FactSet data showed. They include home improvement retailer Home Depot and other companies tied to the economic cycle, including one of the key financial stocks, JPMorgan.

Quotes of companies whose directors will participate on Thursday and Friday in the talks between US President Donald Trump and Chinese President Xi Jinping rose on Wednesday. These summit talks could be the next test of strength for the U.S. stock market, Bloomberg writes.

The securities of large technology companies are becoming a safe bet for investors seeking refuge in a "fragile" market created by the war with Iran, Principal Asset Management's chief global strategist Xi Sha told Bloomberg. Market participants want to see strong balance sheets and positive cash flows, as well as "a protective moat around a lot of companies - and of course AI tech is at the heart of that," she said.

The role of tech stocks as a safe haven marks something of a reversal from their historical role as high-risk and potentially high-yield instruments, Bloomberg notes. They lead the S&P 500 index in gains this quarter - after falling more than 9% last quarter.

Sha warned that these papers are not immune to the possible effects of war. Many components for semiconductor manufacturing typically come through the now-blocked Strait of Hormuz. However, thanks to the collapse at the start of the Iranian crisis, investors could gain access to what the analyst believes is "a long-term theme that will stay with us for many years, perhaps decades."

"The bet on chip maker stocks has, in a sense, taken on a life of its own: investors, I think, believe that the demand and growth in this segment is so structural that other, more cyclical macroeconomic factors aren't really changing that dynamic," Ross Mayfield, an investment strategist and vice president at Baird Private Wealth Management, told CNBC. - "Against the backdrop of everything that's going on in the world, especially the oil shock, I think investors have felt safe taking refuge in these stocks because the [artificial intelligence] boom is still going to continue.

This article was AI-translated and verified by a human editor