By Julien Ponthus

(Reuters] – On Friday tech stocks showed a tentative bounce as investors reacted to Amazon’s (NASDAQ.) stellar performance. This convinced them not to lose heart in a sector that had been weakened due both to a worldwide monetary tightening cycle (NASDAQ.) and the recent crash at Facebook (NASDAQ.:).

Following a disastrous forecast by Mark Zuckerberg, the chief executive of Facebook saw more than $200 billion of their market value disappear. This was the largest single day slide in American history.

Meta’s stock market selloff spread to other listed tech firms, driving Wall Street deeper into red before Amazon’s compelling earnings beat on Thursday improved the mood.

The positive results of the tech giant’s announcement prompted Asian stocks to rise about 1%, while Amazon shares were listed in Frankfurt up by 12%.

Pre-market trading saw shares of social media platform SNAP rise more than 50% after falling by a quarter during the last session. This is another indication that sentiment toward the sector was stabilizing.

The European tech index fell 0.7% at 1108 GMT on Thursday, compared to the Nasdaq’s decline of 3.7%. It outperformed the other pan-European indexes. Futures were up 0.7% and Nasdaq opened higher.

MIXED BAG

Fourth-quarter earnings season was mixed for tech companies. They suffered bitter losses from streaming giant Netflix and fintech PayPal (NASDAQ), but were partially compensated by positive results by Apple (NASDAQ), and Microsoft (NASDAQ).

Mark Haefele is chief investment officer of UBS Global Wealth Management. He said that the overall picture was not bleak.

In a morning note, he stated that “Overall the earnings outlook remains solid with the global technology sector on track to earnings growth of approximately 15%.”

We expect that valuations will stabilize in our base case and strong earnings growth for the mid-teens to reflect in share prices during the next twelve months.”

As the future growth promises of the tech sector are no longer attractive, many investors began trimming their stakes in stocks before the earnings season. Central banks raising rates will increase the potential financial rewards for holding government bonds.

Since the U.S. Federal Reserve announced it would begin raising interest rates next month, top investment banks have recommended that portfolios be diversified towards stocks that perform well in inflation or bond yields rising.