American stocks rose on 22 July, somewhat alleviating the concern over US economic stability in the light of the global pandemic and the tension in trade relations with Beijing.
The technology sector rose more than any S&P sector.
Nasdaq CEO Adena Friedman said that many businesses in the tech and biotech world are "driving the economy forward,” with investors looking beyond Covid-19.
"There are a lot of companies in the tech world and in the biotech world that are really driving the economy forward, and I think investors are looking beyond COVID and saying what are the trends that are going to persist," says @Nasdaq CEO @adenatfriedman pic.twitter.com/iZPZ6sxpPt— Squawk Box (@SquawkCNBC) July 22, 2020
"One reason for the enthusiasm that investors have had with tech stocks is because they are coming through in terms of maintaining their earnings growth and advancing revenue increases," said Sam Stovall, chief investment strategist at CFRA Research in New York.
Earlier on Wednesday, futures had taken a hit, following the spike in tensions between Washington and Beijing, after Chine was told to shut down its consulate in Houston. China is reportedly planning to reciprocate the measure, by closing the US consulate in Wuhan.
“All of the above points to fresh and escalating tensions between the U.S. and China that have European equities down across the board today. US futures are mixed with the Dow, S&P 500, and the Russell pointing to a weaker open. By comparison, Nasdaq futures point to a modestly positive open. Odds are there will be further developments to watch on the U.S.-China front just as the June quarter earnings season heats up further today. Investors will also want to keep tabs on a unified coronavirus budget plan that is winding its way through Washington,” Nasdaq reported.
Escalating tensions between the U.S. and China have European equities down across the board. U.S. futures are mixed with the Dow, S&P 500, and the Russell pointing to a weaker open. @ChrisJVersace and @EllesEconomy discuss today's markets: https://t.co/QKZam7ErEd— Nasdaq (@Nasdaq) July 22, 2020
Texas Instruments Inc forecast third-quarter revenue above estimates, due to higher demand for chips used in PCs and servers, as well as tablets.
The drug giant Pfizer Inc jumped 2.4%, following the promise $1.95 billion from the US government for Pfizer and the German biotech firm BioNTech SE. The two companies are meant produce and deliver 100 million doses of their COVID-19 vaccine candidate.
(2/3) “I am extremely proud of the Nasdaq team and how we are serving our clients as we continue to navigate the pandemic,” said @AdenaTFriedman, President and CEO, @Nasdaq. pic.twitter.com/WZ6B0ZPmFt— Nasdaq (@Nasdaq) July 22, 2020
Nasdaq recorded 59 new highs and six new lows, while the S&P index recorded 32 new 52-week highs and one new low.
According to Nasdaq, the economic recovery is looking "more and more" to assume the W-shape, "as areas that are experiencing new spike [Covid-19] cases" suffer from repeated decline in business activity.
The Covid-19 crisis pushed the US economy, as many others globally, to the edge. Washington is facing a sizeable budget debt and high unemployment rate. On a national level, the number of employees at small and medium-sized businesses in the US remains more than 23% below its pre-crisis levels for the 7-day period ending July 19.