Tech Rally Lifts Nasdaq, Crypto as S&P and Dow Lag

On Wall Street on April 22, technology-led buying drove the Nasdaq higher and helped lift major cryptocurrencies, while the S&P 500 and the Dow Jones Industrial Average failed to keep pace.

Semiconductor stocks, software companies and large-cap technology names were the strongest performers on the Nasdaq. Short-covering in some software names added to the gains. The S&P 500 and Dow underperformed as producer manufacturing, communications and transportation sectors closed lower.

Market participants identified the scheduled restart of US-Iran negotiations on Friday as a primary geopolitical factor. U.S. officials have expressed eagerness to reach an agreement, and Iran has demanded that economic restrictions be lifted before talks progress. Reports of disagreement between the Islamic Revolutionary Guard Corps and other Iranian government factions were cited as complicating consensus on negotiating terms.

Corporate earnings also influenced trading. Tesla reported results on April 22. SAP, Sanofi and American Express are due to report next. Key purchasing managers index readings for the EU, U.K. and U.S. are on the economic calendar this week.

In other markets, crude oil drew renewed attention as an indicator of geopolitical risk, and metals posted a partial recovery from earlier losses. Currency trading was muted ahead of the negotiations and data releases; the Swiss franc fell while the Australian dollar strengthened. Cryptocurrencies rose alongside technology stocks.

Analysts observed that gains were concentrated in a limited set of sectors and that short-covering contributed to the advance. The US-Iran talks, upcoming corporate reports and scheduled economic releases are set to provide further market-moving information this week.