After two tumultuous months, the technology sector is once again at the heart of the market rally given a deluge of upbeat earnings results. This is especially true as the ultra-popular Select Sector SPDR Technology ETF (XLK – Free Report) has gained 5.1% in a month versus gains of 2.2% for SPDR S&P 500 (SPY – Free Report) and 4.7% for PowerShares QQQ (QQQ – Free Report) .

Total earnings from 84.3% of the sector's market cap in the S&P 500 index are up 29.4% on 12.1% higher revenues, with a 91.5% companies beating both earnings and revenue estimates. While the earnings beat ratio and growth rates are tracking above historical periods, revenue surprise is lower than Q1.

The six key technology stocks, viz., FAAMNG — facebook (FB – Free Report) , Apple (AAPL – Free Report) , Amazon.com (AMZN – Free Report) , Microsoft (MSFT – Free Report) , Netflix (NFLX – Free Report) and Alphabet (GOOGL – Free Report) — which slipped into deep correction territory in late March, strongly restored positive sentiments with better-than-expected results and optimism for future growth. In particular, Apple led the impressive surge following upbeat results and Warren Buffett's decision to increase his stake in the firm.

Additionally, a string of reports from other tech players like Advanced Micro Devices (AMD – Free Report) , Intel INTC, Visa V and PayPal (PYPL – Free Report) also fueled the rally and instilled confidence in the sector.

Coming to sector fundamentals, the twin tailwinds of Trump's tax cuts and a rising interest rate scenario as well as the emergence of cutting-edge technology are acting as catalysts. This is because tech titans hoard huge cash overseas and are poised to benefit the most from reduced tax rates. These companies are also sitting on a huge cash pile and in a position to increase payouts to their shareholders.