The stock market started out the week on a positive note Monday, with the S&P 500 inching up a modest 0.65%, and tech stocks doing quite a bit better.
By the time trading closed for the day, shares of telemedicine specialist DocuSign (NASDAQ:DOCU) ended up 4.3%, database designer MongoDB (NASDAQ:MDB) gained 5.2%, and freelancing facilitator Upwork (NASDAQ:UPWK) had scored a 10.7% gain.
All three of these companies hail from the tech sector, and tech stocks have been one of investors' favorite places to invest in the rebound from the February/March coronavirus sell-off. Shares of the S&P 500 Information Technology index have gained 6.5% over the past month alone. Today, tech stocks continued to outrun the market, tripling the broader S&P 500's returns by gaining more than 1.9%, even with no news to back up the rally.
But there was some news. Johns Hopkins University reported today that global cases of COVID-19 have topped 9 million, of which nearly 2.3 million cases have been recorded in the United States. More than 120,000 Americans have succumbed to the virus since it first appeared here back in February, more than a quarter of all deaths globally.
And the situation seems to be getting worse, not better. The past week saw five straight days of climbing rates of coronavirus infection in the United States, followed only on Sunday by a one-day reprieve. This may not yet be the much-warned-about second wave of the coronavirus, but it kind of feels like it.
And if a resurgence of the virus is upon us, and if that raises the prospect of renewed quarantines, stay-at-home orders, and shutdowns of businesses, then this would logically increase demand for tech-fueled services such as telemedicine (DocuSign) and work-from-home freelance assignments (Upwork).
We actually have more than just logic to go on here. All three of the stocks named above defied the coronavirus downturn so far by growing their revenue strongly even as the economy collapsed around them. Upwork's sales grew 22% last quarter, DocuSign's 39%, and MongoDB's sales growth was the fastest of all: 46%!
For this reason, if no other, the surprising strength of tech stocks today in the face of renewed threats from the pandemic maybe shouldn't come as such a surprise at all.