Nasdaq surges as tech stocks bounce back

Tech stocks bounced back fiercely Tuesday as the Nasdaq recouped Monday’s deep losses. A retreat in U.S. bond yields fueled buying of battered tech titans like Tesla, Apple, and Amazon.

The Nasdaq exited the correction territory it had entered Monday when it closed more than 10% below its peak.

The Nasdaq gained 3.7% Tuesday. The S&P 500 added 1.4%. The Dow closed flat near the session’s low.

But O’Neil Global Advisors Chief Investment Officer Randy Watts says investors should refrain from buying tech stocks on the dips just now.

“Normally, when we have these kinds of corrections, these things resolve themselves in weeks and months, not days. My sense of the market right now is we’re actually not done with this correction.”

Economically sensitive consumer cyclical stocks like Carnival and Chipotle led the rally. Investors got positive news on the outlook for the economy when the OECD doubled its growth estimate for the U.S. this year.

Tesla shares snapped a five-day losing streak with a powerful 20% jump – its largest one-day gain in nearly 8 years. Its sales in China rose sharply last month, and an analyst hiked his rating on the electric car maker.

GameStop shares rose for the fifth day, up 27%. That’s on top of Monday’s 40% rise. Investors bet on the video game retailer’s new e-commerce strategy and speculated that small investors would pour stimulus check funds into stocks.