Stocks rise as Tesla and tech shares rebound

A day after dragging the Nasdaq Composite into correction territory, tech stocks rebounded and led a rally on Wall Street — the latest surge in the sector’s volatile start to the year.

Tesla shares were particularly hot after the electric car maker said Chinese demand for its vehicles improved in February.

“Considering the Lunar New Year in China which took up a portion of February, we would characterize these February results as quite impressive and ahead of Street expectations,” wrote Wedbush Securities analyst Dan Ives.

Tesla shares climbed nearly 18% in the early afternoon.

The S&P 500, which Tesla joined in December, was up nearly 2%.

The tech-heavy Nasdaq was up almost 4% in the early afternoon, on track for its best day since November.

That’s a huge gain by any standard, but it’s particularly stunning after Monday’s selloff that put the index in correction territory, defined as a drop of at least 10% from its peak.

Tech stocks have been on a wild ride in 2021: Following a surge at the start of the year, they began to pull back recently.

Investors worried that the recovering economy would mean stocks that performed well during the lockdown of 2020 had run their course. Strategists began talking about rotating their portfolios away from tech to include more cyclical stocks again.

“The cyclical rotation has been running strong for months and today is an overdue buying the dip for technology stocks,” said Edward Moya, senior analyst at Oanda, in a note to clients.

Aside from tech stocks, energy and consumer shares are also doing particularly well Tuesday.