Markets News & Opinions

Amazon’s Stock Surge Powers Nasdaq Closer to Record Highs

After a down week, the technology-focused Nasdaq Composite Index is within striking distance of a new all-time high.

  • The Nasdaq Composite Index came within 1.6% of all-time highs Monday.
  • Amazon is the Nasdaq’s second-best performer in percentage terms.
  • The broader S&P 500 Index also rallied Monday, but the Dow lagged.

Surging technology shares propelled the Nasdaq Composite Index sharply higher on Monday, a sign that Wall Street’s tech-driven rally hasn’t topped out yet.

Nasdaq Rallies; Broader Market Mixed

The Nasdaq Composite Index came within 1.6% of all-time highs Monday morning. The index rallied 1.5% to 10,663.00.

The Nasdaq is in the process of erasing all of last week’s declines. | Chart: Yahoo Finance

Citrix Systems (NASDAQ:CTXS) was the Nasdaq’s best-performing stock, rising 6%. Shares of Amazon Inc. (NASDAQ:AMZN) rose 5.5%.

Amazon shares are rallying ahead of corporate earnings. | Chart: Yahoo Finance

Surging tech shares also propelled the S&P 500 Index higher. The large-cap index rose 0.4% despite losses in seven of 11 primary sectors.

The Dow Jones Industrial Average declined by as much as 157 points before paring losses. It was last down 47 points or 0.2%.

The Nasdaq is in the process of erasing all of last week’s decline. The tech-heavy benchmark fell 1.1% last week, while the S&P 500 and Dow rose 1.2% and 2.3%, respectively.

Bubble Fears Persist

Technology shares have vastly outperformed the broader stock market over the past six months. Fears that the so-called tech bubble is about to pop have persisted in the wake of record Federal Reserve intervention in the market.

The sector’s weighting in the S&P 500 has also raised alarm. For the first time since the dot-com bubble, technology stocks now account for more than 35% of the S&P 500.

Galaxy Digital CEO Mike Novogratz says technology stocks are in a bubble: 

If monetary policy were to tighten, technology stocks would be the first to suffer, according to Bank of America’s chief investment strategist Michael Hartnett. Over the past six months, tech-sector outperformance has been the largest since the 1999 dot-com bubble and the 2008 global financial crisis.

As ZeroHedge notes, if the S&P 500 were just “tech, health care, Amazon, Google,” it would now be worth 4,173–far above the February high of 3,393.52. If the S&P 500 were “everything else,” it would be worth 2,924.

Although global monetary policy remains ultra-loose and highly accommodative, gradual signs of tightening have emerged in China. Even the Federal Reserve’s balance sheet appears to have topped out for now.

Although this hardly classifies as tightening, the Fed’s balance sheet appears to have topped for now. That could be dangerous for a market that relies on central-bank liquidity. | Chart: Federal Reserve

Strategists at Bank of America warn that tighter policy conditions could be the pin that pops the technology bubble. If that were to occur, Chinese tech stocks would be the first to fall.

Last modified: September 23, 2020 2:08 PM

Sam Bourgi

Financial Editor of, Sam Bourgi has spent the past decade focused on economics, markets, and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance, and Forbes. Sam is based in Ontario, Canada and can be contacted at or at LinkedIn.