Tuesday was a mixed day for the stock market, but the Nasdaq Composite (^IXIC 0.34%) came out on top by midafternoon. The Nasdaq was up two-thirds of a percent as of 1:30 p.m. EDT today even as some other major market benchmarks remained down on the day.

Investors were surprised in 2020 when the Nasdaq was able to mount such a huge gain even during the worst of the pandemic. Those gains have reversed themselves very slightly in early 2021 as investors started to anticipate a return to more normal conditions in the economy. However, Tuesday's news regarding vaccines from Johnson & Johnson (JNJ 0.03%) appeared to give the stay-at-home stock niche a renewed boost of energy.

Four vials labeled COVID-19 vaccine.

Image source: Getty Images.

Big gains for last year's favorites

Many of the plays that worked best for much of 2020 were back in vogue on Tuesday afternoon. Zoom Video Communications (ZM -4.26%), which has played an increasingly vital role in sustaining levels of communication and collaboration during the pandemic, was up nearly 6% in early afternoon trading. Other software-as-a-service (SaaS) stocks showed similar resolve, with Atlassian (TEAM -4.18%) rising 4%, DocuSign (DOCU -0.27%) picking up 5%, and Okta (OKTA -1.18%) matching Zoom's 6% uptick.

Some other stay-at-home plays also showed signs of life. Peloton Interactive (PTON -3.38%) had fallen sharply in the past couple of months as optimism over reopening grew, but its stock was up more than 2% Tuesday amid new fears of prolonged coronavirus restrictions.

The catalyst came from the Food and Drug Administration and the Centers for Disease Control and Prevention, which recommended a pause in administering the one-dose vaccines developed by Johnson & Johnson. Rare blood clots appeared in a half-dozen cases, according to the regulators. That was sufficient to raise enough concerns to warrant the halt, in their opinion, despite the CDC's repeated statements about the deadly toll COVID-19 has taken and its urging Americans to get vaccinated.

What investors should expect

Even if the pause in J&J vaccines delays full implementation of vaccination programs by a month or two, that isn't long enough to justify a significant change in the valuation of any given stock. Big moves in shares of vaccine manufacturers like Moderna (MRNA -1.69%) make more sense because of how important the present is to their overall valuation.

But for Zoom, Peloton, and SaaS stocks in general, the much bigger question is how well their businesses will hold up once the pandemic is fully under control. Some worry about the disappearance of the tailwinds that have helped their businesses prosper over the past year, while others believe that clients will continue needing the services they provide regardless of the coronavirus situation.

Investors can expect both recovery plays and the Nasdaq stocks that did well last year to remain volatile for the time being. In the long run, though, their ability to prosper throughout the business cycle will determine whether their shares can keep rising or will give back their extensive gains.