Nasdaq’s (QQQ) correction appears over. The ETF bottomed at around $660 in late July. Since then, the tech-heavy ETF soared, trading at around $725. It benefited from a record rally in some of the Magnificent Seven companies.
Microsoft (MSFT) regained shareholder confidence after it posted strong revenue from its cloud business, Azure. Amazon (AMZN) posted strong AWS revenue, sending the stock to a short-lived rally to a high of $287.20. Meta Platforms (META) dropped after reporting higher spending on AI. That sell-off did not last, as META stock snapped back.
Is the correction permanently over? Traders piled back onto South Korea’s ETF (EWY). Micron (MU) and SK Hynix (SKHY) also jumped, while SanDisk (SNDK) added around $400 back to its share price.
Optical stocks like Coherent (COHR) gained up to around 30% in two trading sessions. Lumentum (LITE) and Ciena (CIEN) also rose on a proposal from the U.S. government to restrict new Chinese optical transceivers. Investors also bought shares of Applied Optical (AAOI) and Credo (CRDO).
Enthusiasm that the U.S. would return to negotiations for a peace deal with Iran lifted markets.
Your Takeaway
The markets are relying too much on any peace between the U.S. and Iran. Iran is in control of any negotiations. It has a strong command of the traffic traversing the Strait of Hormuz. That puts the U.S. in a weak negotiating position. Any poorly agreed-upon deal would hurt the U.S., and ultimately hurt tech valuations.
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