The Nasdaq ended at a record high on Tuesday, lifted by Amazon, Microsoft and other top-shelf tech companies as investors shifted their focus to growth stocks.

Microsoft rose 1.1% and its stock market value briefly breached $2-trillion for the first time, while Apple, Facebook and Amazon also rallied more than 1% each.

Amazon had over $5.6-billion in total online sales in the US on the first day of its Prime promotional event, according to Adobe Digital Economy Index.

In a congressional hearing, meanwhile, Federal Reserve chairman Jerome Powell reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation.

So-called value stocks, expected to benefit from the economic recovery, have outperformed in 2021, while growth stocks, including major tech names like Apple and Nvidia, have rallied since the Fed last week took a stance on future rate hikes viewed by many as more aggressive than expected.

Rising fortunes

The S&P growth index has added almost 2% since before the Fed last Wednesday projected an accelerated timetable for interest rate increases, compared with a drop of almost 2% in the value index.

“The market was caught off-guard regarding the Fed’s hawkish commentary, and that’s 100% of what is happening,” said Andrew Mies, chief investment officer of 6 Meridian. “All the smart people were surprised about how hawkish the Fed was, and now they are adjusting their portfolios.”

Nine of the 11 major S&P sector indexes rose, with consumer discretionary and tech the biggest gainers, each up about 1%. The Dow Jones Industrial Average rose 0.2% to end at 33 945.58, while the S&P 500 gained 0.51% to 4 246.44. The Nasdaq Composite climbed 0.79% to 14 253.27. — Reported by By Noel Randewich and Devik Jain, with additional reporting by Devik Jain, Sujata Rao-Coverley and Medha Singh, (c) 2021 Reuters