Tech Resilience: Nasdaq-100 Rallies as Geopolitical Fears Recede

The tech-heavy Nasdaq-100 has staged a significant recovery, gaining 17.4% since March 30. This rally comes despite the backdrop of the Iran war, which initially triggered a sharp market sell-off as investors sought safety in haven assets. Between February 27 and March 30, the index shed 8% of its value amid military strikes and threats to the Strait of Hormuz. However, recent price action suggests a shift in sentiment, with the index now posting a 6.7% gain year-to-date. This suggests that investors are largely discounting the risk of a prolonged conflict that could drive higher-for-longer inflation and force the Federal Reserve to delay rate cuts. Software stocks have been a primary driver of this rebound. The iShares Expanded Tech-Software Sector ETF (IGV) has climbed 18.8% since April 10, reflecting a decline in fears that artificial intelligence would disrupt the software-as-a-service (SaaS) model. Despite this recent momentum, the IGV remains down 16% for the year. The recovery extends beyond the tech sector. The S&P 500 has risen 12.5% from its March 30 low, while the Vanguard Total International Stock ETF (VXUS) has gained 10.7% in the same period, with emerging markets in China, Taiwan, and India showing even stronger gains. Analysts suggest the rally indicates a market belief that the conflict will not lead to systemic economic collapse. Because most large-cap tech firms lack direct exposure to Middle Eastern oil shipments, they are increasingly viewed as a safer bet for growth in a volatile geopolitical environment.