So, remember Monday? When everyone was freaking out about a research note warning that artificial intelligence might, you know, replace human jobs? Well, Tuesday was the market's way of saying, "Actually, maybe AI is still pretty good for business—especially if you're in the business of selling chips to AI companies."
U.S. stocks staged a nice little rebound, shaking off the previous day's jitters. And the catalyst was a classic piece of good news: a big, fat deal.
Risk sentiment improved dramatically after Advanced Micro Devices Inc. (AMD) announced it had secured a major infrastructure agreement with Meta Platforms Inc. (META). We're talking about a deal worth up to $100 billion over five years for AMD to supply chips to Meta's data centers. They're starting with one gigawatt of capacity this year and plan to scale all the way up to six gigawatts. Not too shabby.
The market loved it. Shares of AMD surged 9%, and that single piece of news seemed to light a fire under the entire technology sector.
By midday in New York, the major indices were all in the green. The S&P 500 was up 0.7%, the Dow Jones Industrial Average had gained 0.8%, and the tech-heavy Nasdaq 100 was outperforming with a 1.2% advance. Even small caps, as measured by the Russell 2000, moved higher.
The bounce was particularly noticeable in software stocks, which had taken a beating on Monday. The iShares Tech-Expanded Software Sector ETF (IGV) rebounded 1.5% after Monday's 4.7% slump. Some of the most beaten-down names led the charge: Salesforce Inc. (CRM) and Adobe Inc. (ADBE) each climbed about 4%.
It wasn't just pure tech, either. In the travel sector, Booking Holdings Inc. (BKNG)—which had sold off sharply in recent weeks amid concerns that AI could disrupt online travel agencies—bounced back with a 5% gain. Maybe algorithms aren't booking all our vacations just yet.
Earnings reports added some extra volatility to the mix. Home Depot Inc. (HD) rose more than 3%, while Constellation Energy Inc. (CEG) gained over 5%. On the flip side, natural gas operator ONEOK Inc. (OKE) lagged, falling 6.7%.
If you looked at sector performance, the message was clear: risk was back on the menu. Technology led the way with a 1.7% gain. Consumer discretionary stocks were up 1.5%, and industrials advanced 1%. On the weaker side, energy was the laggard, down 0.6%, alongside healthcare, which dipped 0.3%.
Over in the commodity pits, gold fell 1.8% to $5,140 per ounce, and silver eased 0.7% to $87. Copper, often seen as a barometer for economic growth, climbed 2.1% to nearly $6 a pound.
Treasury yields hovered near technical support, with the 10-year yield gravitating around the 4% threshold—revisiting levels last seen during November's tech selloff. And in crypto, Bitcoin (BTC) traded flat around $64,000, showing little reaction to the equity rebound. Crypto does its own thing.
