The new US-Iran ceasefire brokered late Tuesday has sent investors rushing back to one of their most beloved sectors: Big Tech.
Some of the most visited stock quote pages on Yahoo Finance on Wednesday morning include “Magnificent Seven” members Nvidia (NVDA), Google (GOOG), Amazon (AMZN), and Microsoft (MSFT) (see list below). All of these stocks are catching strong premarket upside moves, and the same goes for other Big Tech players like Oracle (ORCL).
Futures on the Dow Jones Industrial Average (YM=F) are up more than 1,000 points in premarket trading on news of the ceasefire.
Recall that since the onset of Operation Epic Fury in late February, large-cap tech plays have fallen out of favor for a few reasons.
Read more: How to protect your money during turmoil, stock market volatility
For one, investors have rotated from these growth names into perceived value plays tied to the war in oil and defense contractors.
Two, with skyrocketing oil prices sparking inflation fears, investors worried rate cuts from the Federal Reserve would be off the table this year. Interest rate cuts have long been viewed as a friend to growth stocks in tech land.
The Magnificent Seven alone have shed more than $1.1 trillion in market cap since Operation Epic Fury kicked off on Feb. 28.
These stocks are now hovering near fresh lows relative to the S&P 500 (^GSPC), JPMorgan strategist Mislav Matejka pointed out in a new note on Tuesday.
“Investors will be breathing a big sigh of relief that an offramp out of the war is being taken even as there’ll be various elements to watch to see whether this leads to sustained de-escalation,” Deutsche Bank strategist Jim Reid wrote in a note today.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].
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