The Nasdaq notched its 10th straight daily gain as investors piled into large-cap technology names. The buying pushed the S&P 500 to 6,967.38 and the Dow to 48,535.99, with strategists pointing to compressed tech valuations, early earnings beats and excess cash on the sidelines as fuel for a tech-led leg of the rally.

Market move and the numbers

U.S. stocks rallied Tuesday as technology shares led the charge. The Nasdaq recorded its 10th consecutive daily gain, while the S&P 500 climbed to 6,967.38 and the Dow Jones Industrial Average finished at 48,535.99. The indexes shook off near-term geopolitical jitters after an announcement signaling an extension of the ceasefire with Iran, and investors focused on corporate results that have so far skewed positive.

Sentiment got a further lift from early earnings: more than 80% of S&P 500 companies that have reported so far beat expectations, according to market commentary. Bond yields were mixed, the dollar strengthened, and Bitcoin pushed above $79,000 — signs that traders were comfortable taking risk on multiple fronts.

Tech’s rebound comes after a difficult start to 2026. The sector fell sharply in the first quarter, dropping more than 9% and moving valuations back toward levels last seen before the AI surge in 2022. That pullback set up the rally, and big-cap tech stocks — the so-called Magnificent Seven — have been the engine pushing indices higher again.

The rally remains narrow: tech leaders are outperforming and breadth is limited even as major averages hit new highs.

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Why bulls say the run has legs

Several strategists argue that the conditions are in place for the tech-led advance to continue. Adam Kobeissi, founder of the Kobeissi Letter, pointed to valuation compression and expanding AI adoption when he said tech valuations are now lower than at the start of the AI boom and that "record highs are on the horizon." Daniel Newman, CEO of Futurum, echoed that view and called the period a "historically opportune moment" to buy into AI-related names.

Torsten Slok, chief economist at Apollo Global Management, put numbers on the valuation shift, writing that tech price-earnings multiples have compressed from around 40x to roughly 20x — a move that brought valuations back to pre-ChatGPT levels. That repricing, he said, reduces the bar for future upside if growth expectations recover.

Jim Paulsen, a veteran strategist, argued there are multiple untapped sources of upside that could keep the bull market going. He pointed to overlooked valuation pockets within the stretched S&P 500, room for earnings expansion outside of narrow tech leaders, and large amounts of cash sitting idle in the private sector. "The U.S. Economy has amazing amounts of excess dry powder floating about the private sector just waiting to be employed in some opportunity," Paulsen wrote, suggesting liquidity could flow into equities and help sustain gains.

Which tech names stand to benefit — and which may not

Market strategists say the coming stretch will favor companies that are hard to displace by AI or that can monetize AI adoption. Futurum's Daniel Newman highlighted large-cap names such as Alphabet, Meta, Amazon, Microsoft and Nvidia as examples of companies positioned to benefit. Wedbush analyst Dan Ives has urged clients to focus on those winners, calling them effectively "on sale" amid turbulent market action.

Yet not all tech stocks will rally together. Newman cautioned that gains won’t be evenly distributed and that firms vulnerable to AI-driven disintermediation are less likely to be beneficiaries of the next leg up.

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Traders say the rally will hinge on first-quarter results and whether gains broaden beyond the largest names. "Record highs are on the horizon," said Adam Kobeissi, founder of the Kobeissi Letter.

This article was created with AI assistance.