U.S. stocks rose Tuesday as tech shares continued to climb in the wake of a flurry of deals activity in the sector.
The S&P 500 advanced 0.9%, and the Dow Jones Industrial Average added 0.6%, about 170 points. The tech-heavy Nasdaq Composite advanced 1.3%.
A wave of multibillion-dollar deals emerging earlier this week from well-known tech companies could boost stock benchmarks for a second day, underscoring the outsize role of a handful of giant firms in U.S. equity markets.
“There’s been exuberance in the tech sector and valuations are high, but M&A means some people think there’s still some assets that aren’t overvalued, they may actually be undervalued,” said Ludovic Subran, chief economist at Allianz. “M&A can be perceived as a sign of undervaluation” and some people will be buying.
Tech stocks continued to climb, extending Monday’s rally. Apple rose 1.9% and Tesla added 4.5%. Nvidia shares advanced 1.8% after it said earlier this week it would acquire chip designer Arm Holdings from SoftBank.