Market snapshot: unstoppable tech stocks blast higher again
Despite raised eyebrows at valuations and areas of uncertainty, Wall Street believes there are very good reasons to own the tech sector. ii's head of markets has the latest.
27th May 2026 08:25
by Richard Hunter from interactive investor
A fresh technology surge and a catch-up session after a long weekend sent the S&P500 and Nasdaq to record closing highs for the umpteenth time this year.
The latest company to join the trillion-dollar club in the US – joining Microsoft Corp, Apple Inc and NVIDIA Corp, each of which have market caps in excess of $3 trillion – was Micron Technology Inc, whose stock jumped by 19% after a raft of broker upgrades. With the demand for computer memory likely to continue on its inexorable path upwards, the most bullish estimates on the Street point to a doubling of the stock to come, even after having trebled so far this year.
Nor was the bullishness confined to Micron, with fellow memory chip stocks Seagate Technology Holdings and Western Digital Corp adding 4% and 8% respectively, and with the Roundhill Memory exchange-traded fund (ETF) surging more than 14% to a new record high. With some of the multi-billion dollar investment into the space beginning to flow through to bumper earnings for some of the participants, analysts are constantly revising their numbers on how far this new tech revolution could go.
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Away from the tech euphoria, the US/Iran conflict has taken a back seat in the eyes of investors, despite clear inflationary signals as the oil price continues to hover around the $100 mark, more than 60% higher than where it started the year.
A gathering of central bank officials in Tokyo saw the Bank of Japan Governor warn that this temporary energy shock could have persistent impacts, while the European Central Bank (ECB) remains hawkish on interest rates. Consensus for a rate hike in the US has subsided, although by the same token any possibility of a reduction this year is also increasingly less likely.
With a hugely successful quarterly reporting season now out of the way, the consumer has come back into focus. A vital cog in the engine of US economic growth, there have been some signs of discontent of late, particularly with prices at the pumps having spiked sharply higher ahead of both the summer driving season and the upcoming mid-term elections. A report on Friday suggested that consumer sentiment was edging towards record low levels, and a follow-up release yesterday painted a similarly disparaging picture, although the dip in confidence was less than economists had been expecting.
Amid the noise, the main indices have continued their upward march, with the technology fervour quite simply steamrollering anything else before it. In the year to date, the Dow Jones has added 5%, and the new record closing highs have resulted in gains of 9.8% and 14.7% for the S&P500 and Nasdaq respectively.
The AI trade also washed over into Asia, with the most notable gains again to be found in the likes of Taiwan and South Korea, with Japan’s tech sector testing new highs.
However, the UK is not a guest of this particular party and the FTSE 100 flatlined at the open Wednesday as investor appetite was focused elsewhere globally. The lack of concentrated tech exposure was a strength earlier this year as investors sought refuge given the strength and stability of the constituents in the premier index, but this has now been supplanted by the need for speed in alternative investment destinations.
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Even so, while the FTSE 100 remains 4% below its own record which was set in February, the index has nonetheless added 5.6% in the year so far, with an average 3% dividend yield adding to the total return.
General sentiment is today hampered by a report suggesting that 80% of UK firms are being affected negatively by the overseas conflict, with 64% hit by higher energy costs and 34% by increasing shipping and logistics fees and supply chain disruption. The FTSE 100 has something of a shield against such a development given its large exposure to overseas earners, which all things being equal should protect most of its defensive qualities.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.