The NASDAQ 100 (QQQ) index continued its winning streak on Wednesday, driven by a key shift in sentiment for the Communication Services sector (XLC) and Transport sector (IYT).
Communication Services and Transport stocks have become the major drivers of the tech-heavy NASDAQ 100 index since the start of the year, as investors have become increasingly bullish on their growth prospects. Analysts have suggested that the recent bullish trend in these sectors may be because of large-scale investments from institutional and retail investors, as well as their strong fundamentals.
The sector weighted Communication Services (XLC) index crossed the $90 mark on Wednesday, setting a new record high. This marked the biggest monthly increase since April 2020, with shares of prominent tech companies such as Facebook, Amazon, Alphabet, Apple, Micron Technology, and Netflix soaring.
Transport stocks have also reaped the benefits of the sector’s buoyancy, with the iShares Transportation Average ETF (IYT) also setting a new record high. Notable stocks that have contributed to IYT’s rise include positive performances from United Airlines, JetBlue, Delta Air Lines, and FedEx.
The Nasdaq 100’s rise has been almost entirely powered by these two sectors, and this new trend reflects the wider confidence that investors have in the future of the global economy. As indications of its future success are buoyed by a surge of institutional as well as retail investor appetite, the index is expected to continue its success for the remainder of the year.
Therefore, with the Communication Services (XLC) and Transport (IYT) sectors at the helm of the Nasdaq 100’s rise, investors should be well-positioned to benefit from this trend for the foreseeable future.
