The sell-off on the Nasdaq technology index eased during trading today, to recover from its lowest levels since late January, slightly offsetting some of its losses. The technology index rose to trade just below the 13,200 levels, after reaching the 12,757 levels during trading on Tuesday, and the heavy sell-off on technology stocks has continued sharply since last week, amid anticipation for inflation figures and expectations of higher long-term interest rates, which may represent an overvalued stock market assessment.
At the end of yesterday's trading, Amazon and Alphabet stocks witnessed a slight recovery, while Tesla, Square and other technology stocks were severely affected, when they originally benefited from consumers staying at home during the pandemic. Also, Zoom shares fell, and Tesla's drop was enough to erase the stock gains made since the start of the year.
Improvement in economic prospects and expectations of a rise in inflation led to intensive selling of US government bonds, thus an increase in bond yields, especially the 10-year bonds, which reached levels not seen for almost a year.
Technically, the index broke through the 50-day simple moving average for the first time since October 28. If the index stabilizes above the support level of 12,750, it is expected to recover targeting the levels of 13,400, and if it succeeds in stabilizing above the 50 day moving average, further recovery towards 13,500 levels could occur.