U.S. stocks and related ETFs ended their losing streak Monday with technology shares leading the rebound.
On Monday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 2.0%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) gained 0.6% and SPDR S&P 500 ETF (NYSEArca: SPY) rose 1.4%.
Technology shares rallied Monday after Nvidia Corp (NasdaqGS: NVDA) agreed to acquire computer-networking supplier Mellanox Technologies Ltd. (NasdaqGS: MLNX) in an all-cash deal valued at about $7 billion, the Wall Street Journal reports.
NVDA shares were up 7.3% and MLNX was 8.3% higher after the announcement.
High-flying, growth stocks like technology companies were among the worst hit over the past year on the quick shift in risk-off sentiment and concerns over the health of the now decade-long bull equity market. Nevertheless, tech stocks have made a swift rebound this year, with the Technology Select Sector SPDR ETF (NYSEArca: XLK), the largest technology-related ETF, up 12.6% year-to-date.
“There may have been too much of a run up from a valuation perspective in technology stocks, but they’re still a growth engine,” Ron Weiner, managing partner and director at RDM Financial Group at HighTower, told the WSJ. “They probably sold off a little too much recently, but long term as an industry they’re well positioned because technology is the future.”