Tech Stocks Surge: Apple, Microsoft Lead as Election Narrows

Update: As trading concluded today, the Nasdaq Composite, which is weighted towards technology companies, increased by 3.8%, while Software-as-a-Service and cloud-based stocks experienced an exceptional surge of 6.2%.

Following substantial increases observed yesterday, technology stocks are demonstrating another significant upward trend in trading before the official market open. Current futures related to the Nasdaq Composite index suggest an increase of 3.4% this morning, considerably exceeding the anticipated 1.7% gain for the wider S&P 500 index.

The overall value of some of the world's leading corporations has increased by several billion dollars this morning, with Apple showing a 3.9% rise in pre-market activity, and Microsoft achieving an even greater gain of 4.4%.

Other important companies within the technology sector are also experiencing growth, as Salesforce increases by 2.9% prior to the market opening, and Twilio adds 3.3% to its current valuation.

The values of frequently exchanged assets have fluctuated considerably over the past 24 hours. The yield on U.S. government bonds decreased overnight – signaling investor confidence in the overall economy – before subsequently increasing as it became apparent that a sweeping political shift would not occur. The potential for a split Congress may limit future economic support measures, which have been a significant factor influencing market activity in recent months.

The exact reasons for the current rise in technology stock prices this morning are not fully understood. A likely explanation is that investors are revisiting strategies employed earlier in the year, where they increased their investments in software companies with the expectation of consistent growth during a time of considerable economic instability.

If a divided Congress results in reduced stimulus, reverting to a previously successful investment approach may seem logical.

This rally is positive news for technology companies, and those with plans to become publicly traded before the end of the year, or in early 2021. However, as with all aspects of this election cycle, circumstances remain subject to change.