By Yasin Ebrahim
Investing.com – The S&P 500 was in rally mode Tuesday, as easing fears about the impact of the Omicron Covid-19 variant and an Apple-led surge in tech pushed the broader market higher.
The S&P 500 rose 2.1%, the Dow Jones Industrial Average gained 1.5%, or 516 points, the NASDAQ climbed 3.1%.
Tech jumped 4% as Apple (NASDAQ:AAPL) soared to a record high after Morgan Stanley hiked its price target on tech giant to $200 from $164.
Apple’s foray into new product categories including augmented reality and virtual reality, which will bolster its valuation, aren’t yet priced into its shares, according to Morgan Stanley.
Chip stocks were also in favor, underpinned by a surge in Intel (NASDAQ:INTC) as the chipmaker detailed plans to take Mobileye, its self-driving car business, public in 2022. Reports suggest self-driving car business could fetch a valuation of about $50 billion, but some on Wall Street suggest that may be somewhat optimistic.
“We do struggle somewhat to understand why Mobileye (F:0ME) should command a $50B valuation,” Wedbush said in a note.
While the move is a positive for Intel, the transaction isn’t expected to change the company’s broader trajectory as its “struggles to maintain share in its core operations,” Wedbush added.
Sentiment on tech was also strengthened by a melt-up in cloud-related stocks following a 20% rally in MongoDB (NASDAQ:MDB) as the database reported a narrower than expected loss.
Amazon (NASDAQ:AMZN), meanwhile, gave up gains as the e-commerce behemoth said it had identified the cause of problems with its cloud services that caused outages across the internet, including Disney Plus, Netflix, and Coinbase.
Cyclicals corners of the market such as energy and financials racked up gains as investors cheered positive updates on Omicron.
The new variant is “almost certainly not more severe than the Delta [variant],” Dr. Anthony Fauci, President Joe Biden's chief medical adviser said Tuesday.
In another positive development, GlaxoSmithKline (NYSE:GSK) said its monoclonal antibodies treatment was effective against the heavily mutated Omicron variant.
Energy followed oil prices higher as positive updates on Omicron and expectations that supply of Iranian crude isn’t likely “anytime soon” amid considerable differences on nuclear talks between the U.S. and Iran, Commerzbank said in a note.
In other news, American Airlines’ Doug Parker is set to step down from his role as chief executive on March 31. Parker will remain as chairman and be replaced by American Airlines (NASDAQ:AAL) President Robert Isom.
On the political front, Republican Senate Leader Mitch McConnell reportedly said he reached a deal with Democratic Senate Majority Leader Chuck Schumer on the debt ceiling, paving a way for Democrats to raise the limit in a procedural vote, Bloomberg reported.