It’s been a brutal year for technology stocks, but there’s a glimmer of hope. The group is now on track to avoid its worst December ever.

The Nasdaq Composite Index rallied 2.6 per cent on Thursday, recovering from a selloff that pushed the index down 11 per cent for the month. As of Wednesday’s close, the index was heading for its worst December since its inception in 1971. 

“It seems more of a short-term breather,” Matt Maley, chief market strategist at Miller Tabak + Co., said by phone. “Stocks from Tesla to Microsoft to Apple are quite oversold on a technical basis. My biggest concern is that yields are likely to stay elevated and the Fed isn’t done raising rates, and the group may decline even further.”

Economic data released Thursday morning showed that applications for unemployment benefits rose slightly last week. The results allayed fears of a supercharged jobs market that would support the case for a more aggressive Federal Reserve. A decline in 10-year Treasury yields for the first time in five sessions also eased some pressure on the rate-sensitive group. 

The rebound is a welcome development for tech bulls — the Nasdaq Composite has lost a third of its value this year as the Fed raised rates at the fastest pace in a generation. However, it provides little relief. The index, down 8.6 per cent so far this month, is still headed for its worst December since the 2018 rout.  

And the Nasdaq Composite remains among the biggest laggards of 2022, with 15 per cent of the gauge’s constituents down at least 80 per cent this year. 

Of course, with one trading day left in 2022 the group may regress. If the Nasdaq Composite Index falls 1.2 per cent on Friday, that would push the index to its worst December in history.