Nasdaq rallies on Monday afternoon to snap losing streak, erasing loss of more than 2%

U.S. stocks staged an afternoon rally on Monday as major tech stocks reversed earlier losses, helping the Nasdaq Composite snap a four-day losing streak.

The Nasdaq closed with a gain of 0.05% at 14,942.83 after falling more than 2% earlier in the day. The S&P 500 closed down 0.14% at 4,670.29 and the Dow Jones Industrial Average finished with a loss of 162.79 points, or 0.45%, at 36,068.87, also well off session lows.

Large-cap tech stocks were under pressure in early trading but were able to stabilize and then move higher as the day wore on. Nvidia, Tesla and Apple all closed higher after losing ground earlier in the session.

The rough start to the year for stocks has come as interest rates have spiked. The benchmark 10-year Treasury yield briefly traded above 1.8% on Monday morning after ending 2021 near 1.51%, but settled back below that level later in the day. On Sunday, Goldman Sachs projected the Federal Reserve will hike rates four times in 2022, signaling that Wall Street increasingly expects the central bank aggressively attempt to curb inflation.

However, the market appeared to be nearing key technical levels on Monday. At its lowest point, the Nasdaq was more than 9% below its record closing high from November, putting it on the verge of a correction. JPMorgan strategist Marko Kolanovic said in a midday note that investors should buy the dip in stocks.

Shannon Saccocia, CIO of Boston Private Wealth, said on CNBC’s “Closing Bell” that the economy should be able to handle a further rise in interest rates.

“Buying the dip in some of these high valuation growth stocks, not necessarily what I’d do today. But I do think from an economic standpoint we are looking at continued growth over the next several quarters … so there’s a lot of positives here that offset some of what’s happening in the interest rate environment,” Saccocia said.

JPMorgan CEO Jamie Dimon struck an optimistic tone on Monday, telling CNBC that he expected strong growth this year even though he saw the Fed raising rates more than four times over the course of the year.

“We’re going to have the best growth we’ve ever had this year, I think, since maybe sometime after the Great Depression,” Dimon told CNBC’s Bertha Coombs during the 40th Annual J.P. Morgan Healthcare Conference.

“The market can have its own fluctuations unrelated to the economy, and I think you need this kind of growth to justify the market. We’re kind of expecting that the volatility will have a lot of volatility this year as rates go up,” Dimon added.

Even with Monday’s upturn, stocks are still down sharply for the year. The S&P 500 has fallen for five consecutive days and is down 2% since the start of January. The Nasdaq is down more than 4% year to date.

Elsewhere, shares of video game publisher Take-Two fell more than 13% after the company announced a deal to purchase Zynga. Retail stocks Nike and Tapestry fell 4.2% and 4.7%, respectively. Lululemon fell nearly 2% after the company said the omicron variant had hurt its fourth-quarter results.