U.S. stock markets experienced a notable rally on Friday, rebounding from a challenging week characterized by tech sector declines. Investors reassessed their concerns regarding the potential disruptions caused by artificial intelligence and the implications of substantial investments by major tech companies.
The Dow Jones Industrial Average led the upward movement, soaring approximately 2.2%, which translates to an increase of over 1,000 points, marking its climb above the 50,000 threshold for the first time. The S&P 500 rose by 1.7%, while the Nasdaq Composite added around 2%, recovering from the steep losses recorded on Thursday and a week of selling pressure.
This recovery comes as executives and analysts from leading tech firms push back against fears that new AI developments will negatively affect established technology companies. While the S&P 500 is back in the green for 2026, it and the Nasdaq are still on track to close the week with losses.
Some prominent tech stocks were crucial to this recovery. Nvidia surged over 7%, and both Broadcom and Tesla recorded significant gains. However, the tech sector is facing challenges, as evidenced by Amazon’s shares, which plummeted 7% after the company disclosed plans for a substantial spending increase to at least $200 billion by 2026, despite a forecast for operating income that fell short of expectations.
The positive sentiment extended beyond equities, with Bitcoin climbing back above $68,000 after hitting a 16-month low earlier. Nevertheless, the cryptocurrency is still set to record its worst weekly performance since 2022, having negated all gains made after the 2016 election.
Bitcoin investment firm MicroStrategy (MSTR), heavily affected by the recent downturn in crypto values, initially reported a quarterly loss. However, its shares surged over 13% on Friday due to the rebound in Bitcoin prices and reassurances from the CEO regarding concerns over debt obligations.
In contrast, Stellantis (STLA), the parent company of Jeep, announced it would incur a charge exceeding €22 billion (around $26 billion) as part of a strategy to reduce its electric vehicle development. As a result, shares of the automaker plummeted more than 20% on Wall Street and in Milan.
Looking ahead, the release of the important January jobs report has been rescheduled from Friday to Wednesday next week. Recent data has indicated troubling signs in the labor market, with job openings falling to their lowest levels since 2020 and an uptick in layoff announcements. These developments may continue to influence market sentiment and economic outlook in the coming weeks.