Update: At the close of trading today, the tech-heavy Nasdaq Composite was up 3.8%, with SaaS and cloud stocks rising a simply bonkers 6.2%.
On the back of sizable gains posted yesterday, tech stocks are once again rising sharply in pre-market trading today. Futures concerning the tech-heavy Nasdaq Composite index are indicating a 3.4% gain this morning, far above a 1.7% gain that the broader S&P 500 index is currently anticipating.
The market capitalization of some of the world’s most valuable companies have added tens of billions of dollars in value this morning, with Apple rising 3.9% in pre-market trading, and Microsoft gaining an even-richer 4.4%.
Smaller key players in the tech market are also rising, with Salesforce gaining 2.9% ahead of the bell, and Twilio adding 3.3% to its own value.
The price of heavily-traded assets have whipsawed during the last 24 hours, with yield on American government debt falling last night — indicating that investors were bullish on the economy as a whole — before rising again when it became clear that no so-called Blue Wave was forming. The prospect of a divided Congress could stifle future economic stimulus, the possibility of which has been a key narrative driver for market trading in recent months.
Precisely why tech stocks are racing higher this morning is not entirely clear. One obvious possibility is that investors are returning to their summer trade, when they bid shares of software-heavy companies higher in hopes of parking their wealth in the firms with the best chance of posting regular growth during a period of intense economic uncertainty.
If a divided Congress means a drag on more stimulus, why not return to the play that worked before?
For tech, and tech-enabled companies hoping to go public before the year ends, or in early 2021, the rally is welcome news. But, as with everything in this election, things could still change.