The Nasdaq Composite breached the 6,000 level for the first time on Tuesday and extended its double -digit gain for the year as investors focus on owning companies with strong growth prospects.
The tech-heavy benchmark climbed as much as 0.7 per cent to 6,022 early in the day after closing at a record high in the previous session.
Renewed appetite for technology stocks and a rally in the so-called Fang stocks — Facebook, Amazon, Netflix and Google — has spurred a near 12 per cent gain for the Nasdaq in 2017, well ahead of the S&P 500’s rise of 6.5 per cent.
Within the main S&P 500 sectors, technology has gained nearly 14 per cent in 2017, well ahead of other big industry groups.
Tech has prospered as investors have sought fast-growing companies against the backdrop of questions over the outlook for the US economy and whether the Trump administration can push fiscal stimulus measures through Congress.
Dennis DeBusschere, head of portfolio strategy at Evercore ISI, said gains for the sector could continue, particularly if the economic outlook once again began to brighten and the Federal Reserve was gradual in tightening monetary policy.
“Tech stocks have a unique mix of defensive, growth and cyclical characteristics so would expect technology stock outperformance to continue as sentiment over the economic growth outlook improves near term and investors expect continued accommodative central bank policy,” he said.
Nasdaq’s gains on Tuesday occurred as investors rotated away from haven assets. The benchmark 10-year Treasury yield rose 3.4 basis points to 2.31 per cent, while gold has fallen 1.3 per cent since Friday.
Wall Street investors will also scrutinise earnings from technology companies, with reporting accelerating towards the end of this week. Analysts reckon the sector will produce earnings growth of north of 13 per cent in the first quarter, according to FactSet data, representing an uptick from 10 per cent pace notched in the final three months of 2016.
Alphabet and Microsoft, which each have market values of more than $500bn, are set to report on Thursday, along with chipmaker Intel. Apple, the world’s biggest company by market capitalisation, and social media heavyweight Facebook report results next week.