What happened
The stock market was having a strong day on Tuesday, with all three major averages well into positive territory. But real estate technology stock Zillow (Z +6.31%)(ZG +6.60%) was a major standout. As of 2 p.m. EST, Zillow shares were up by more than 11%.
So what
There's no company-specific news fueling today's move. Instead, the main cause seems to be the broad-based rally in tech stocks that have been beaten down lately. Of the three major indices, the tech-heavy Nasdaq is by far the best performer today, rising more than 4%.
Image source: Getty Images.
Stocks like Zillow had been under pressure mainly because interest rates have been rising, and fast. Over the past month, the 10-year Treasury yield (generally a good benchmark for the overall interest rate environment) has risen from less than 1.2% to nearly 1.6%, a pretty sharp move. I'll spare you the economics, but the key point for investors to know is that rising rates are generally bad for highly valued growth stocks.
Now what
Today we're seeing rates pull back for the first time in a while, and that's what appears to be fueling the relief rally. But it's worth mentioning that even after today's pullback, Zillow is still down by 30% since mid-February. So, even though we're seeing a double-digit rise today, that doesn't necessarily mean you've missed out on your opportunity to add shares of Zillow and other tech stocks at a steep discount relative to where they were trading just a few weeks ago.
