Tech stocks bounced back from their worst open in months Tuesday, after prepared testimony from Federal Reserve Chairman Jerome Powell cooled the rate fears that have fueled a late February rout.
Many major stocks were down, but only modestly so. Tesla Inc. had fallen 5% after dropping as much as 12% in early trading, while the Nasdaq Composite Index was down 1.9% after an early decline of 4% put it on track for its worst day since September. The index is down about 6% from its peak Feb. 12, as rising U.S. interest rates prompt a broad re-evaluation of investor growth expectations, and on track for a sixth straight decline—its longest pullback in a year.
Tesla, whose 743% surge last year highlighted the tech-led market rebound from the coronavirus selloff, is now down for 2021 and has lost a quarter of its value since the electric-car firm said Feb. 8 that it had spent $1.5 billion on bitcoin in a bid to boost returns on cash.
Other investor favorites were also recovering after being hit hard in early trading. Moderna Inc., the biotech maker of a major Covid vaccine, was down 8% after falling as much as 13%. Apple dropped 2.8% and Amazon.com Inc. fell 1.5%.
The tech firms have emerged as a favorite of the small investors who have piled into stock and options trading over the past year, with Nasdaq rising 44% in 2020. But the scale of the rally has prompted concerns that many of the stocks are overvalued, making them vulnerable to sudden slumps.
