Tech Retakes Lead Heading into Q4: Stocks to Watch

The Nasdaq rallied 2% as technology stocks rebounded despite the Federal Reserve raising its benchmark rate to a range of 3.75%-4.00% and signaling additional increases ahead. Semiconductor and memory chip stocks drove the move higher, with AMD (AMD) and SNDK (SNDK) leading the sector gains on strong earnings estimate revisions that outweighed concerns about higher discount rates eroding growth-stock valuations.

The rotation back into growth names marks a shift in positioning heading into the fourth quarter. Investors had been avoiding rate-sensitive technology stocks throughout the Fed's tightening cycle, but upward earnings revisions in the chip space are pulling capital back into the sector despite the higher-for-longer rate environment.