A battered corner of tech is showing life again.
Semiconductor stocks, via the iShares Semiconductor ETF (SOXX), and large-cap tech, via the Technology Select Sector SPDR Fund (XLK), are on a 10-day tear. But software has been one of the missing pieces in the tech-led rebound. Now that may be changing.
The iShares Expanded Tech-Software Sector ETF (IGV) is set for its best two-day run since last April, led by heavyweights including Microsoft (MSFT), Oracle (ORCL), Palantir (PLTR), Salesforce (CRM), and Palo Alto Networks (PANW).
The key level in IGV for software bulls was $76, an area that held as support in both February and March. But on Friday, the ETF broke below it — a move that looked like a real breakdown in one of the market’s most important growth groups.
Instead, sellers lost control almost immediately.
IGV snapped back on Monday and is extending that move again today, reclaiming $76 and reversing what technicians call a bear trap — when prices break support, lure in sellers, then quickly reverse back above the breakdown level. In plain English, it was a failed breakdown.
That’s constructive not just for software, but for the broader market. The Nasdaq indexes (^IXIC, ^NDX) have been leading alongside tech and semiconductors, even without much help from software.
If software is finally joining the party, the rally is getting broader — and with the S&P 500 (^GSPC) sitting less than 1% from a record closing high, that could put fresh highs in play sooner rather than later.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance