Market Recovery Optimism Prevails: 5 Tech Stocks To Buy

The U.S. stock market gained on Jul 2 as investor optimism about market recovery from the COVID-19 crisis got a boost after the U.S. Labor Department reported an unexpected drop in unemployment rate. According to the latest data released by the U.S. Bureau of Labor Statistics, the unemployment rate fell to 11.1% in June from 13.3% in May.

The U.S. economy added 4.8 million jobs in June, marking the second consecutive month of gains following more than 20 million of job losses recorded in April due to the pandemic. In May, the economy created 2.7 million jobs, bringing down the unemployment rate to 13.3% from the post-World War II high of 14.7% in April.

Notably, the stock market is in a recovery mode since April after bottoming out in late-March due to the pessimism surrounding the coronavirus crisis. Optimism over a potential vaccine for COVID-19 and an uptick in economic activities, with lockdown measures starting to ease, are mainly driving the U.S. stock market.

The latest data released by the Labor Department has further boosted investor confidence about the economy’s fast recovery from the coronavirus crisis.

Tech Sector Playing Crucial Role in Market Rebound

The technology sector has played a crucial role in the quicker-than-expected recovery of the stock market. Since April to date, the Technology Select Sector SPDR (XLK - Free Report) , which tracks an index of the S&P 500 technology stocks, has rallied 31%.

Moreover, the ETF has a positive year-to-date return of 14.8%, outperforming the gains of all three major U.S. indices. While the Tech-laden Nasdaq index has gained 13.8% year to date, the Dow Jones and the S&P 500 indices fell 9.5% and 3.1%, respectively.

The pandemic has, surprisingly, opened up newer avenues of growth for tech companies. The coronavirus-led global lockdown is fueling demand for PCs, notebooks and peripheral accessories, as more and more workers and students are now working and learning from home.

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