NEW YORK — Amazon led Friday's tech gains, with shares rising 15.3 percent to $271.58. Alphabet climbed 6.7 percent to $356.13. Both moves signal a potential reversal for momentum equities after a brutal July.
The S&P 500 rose 0.7 percent to 7,490 and the Nasdaq gained 1.0 percent to 25,374. The broad advance followed a month that punished stocks favored by momentum strategies—July's decline marked the largest wipeout for the trade in over two decades.
The momentum trade targets stocks with strong recent price performance, typically high-growth technology names. July's selloff hit those positions hard as investors rotated out of high-multiple assets.
Analysts cite rising inflation concerns and Federal Reserve Chair Kevin Warsh's firm stance on interest rates as catalysts for the correction. Higher rates reduce the present value of future earnings, making growth stocks less attractive.
Microsoft rose 3.0 percent to $464.72. Meta Platforms gained 3.3 percent to $556.71. Nvidia advanced 2.9 percent to $200.75. The broad participation suggests capital is returning to the sector as August trading begins.
Not every tech name joined the rally. Apple dropped 7.4 percent to $308.91, a reminder that the recovery remains uneven and company-specific headwinds still matter.
The Russell 2000 fell 0.5 percent to 2,931, suggesting the rebound is concentrated in large-cap technology rather than a broad return to risk appetite.
July's heavy selling pressured portfolios built on growth and technology exposure. The scale of the decline drew comparisons to the dot-com era, reflecting the severity of the capital rotation.
Whether Friday's move marks a durable bottom or a short-term bounce remains the key question. Q3 earnings reports from major technology companies will provide the clearest read on whether fundamentals support the rebound.
Treasury Secretary Scott Bessent said the Treasury is monitoring market liquidity, with comments earlier this week stressing financial stability during periods of heightened equity volatility.
Investors should watch sustained inflows into technology ETFs and a reduction in short interest on high-growth names—those are the data points that will confirm whether the momentum trade has genuinely reversed.
