U.S. stocks rallied sharply on Friday, with the Dow Jones Industrial Average soaring more than 1,100 points to close above the 50,000 mark for the first time in a powerful recovery from a week dominated by steep losses in technology shares.
The blue-chip index jumped 2.3% to finish at 50,015.07, turning positive for the week. The S&P 500 gained 1.8%, while the Nasdaq Composite climbed 1.9%, both paring their weekly declines significantly after several days of intense selling pressure, particularly in software and AI-related names.
Sector Rotation and Tech Bounce
Friday’s rally was fueled by a broad rotation, with investors moving into cyclical and value stocks. Industrial giant Caterpillar surged 6%, and Goldman Sachs rose 4%, contributing heavily to the Dow’s record run. The small-cap Russell 2000 index also outperformed, gaining 3%.
Meanwhile, several battered tech stocks rebounded. Chipmakers Nvidia and Broadcom each soared about 7%, while Oracle and Palantir advanced 3% and 4%, respectively. The VanEck Semiconductor ETF rose 5%.
Despite the bounce, some software names like ServiceNow remained under pressure amid lingering concerns that generative AI could disrupt traditional software business models.
Earnings Movers
Amazon bucked the positive trend, tumbling 7% after its fourth-quarter earnings per share slightly missed estimates and the company forecast $200 billion in capital expenditures for 2026.
Conversely, Reddit shares jumped 13% after reporting better-than-expected earnings and announcing a $1 billion share buyback program. Children’s food company Once Upon a Farm, co-founded by actress Jennifer Garner, debuted on the NYSE, popping 19% from its IPO price.
Crypto and Sentiment Shift
Bitcoin recovered 11% to trade back above $70,000, easing some risk-off sentiment after a steep sell-off that had pushed it down more than 50% from its October 2025 peak.
Market sentiment also got a lift from the University of Michigan’s Consumer Sentiment Index, which rose in February as near-term inflation expectations dropped to their lowest level in over a year.
Analyst Actions
Notable analyst moves included Oppenheimer upgrading Roku to Outperform, citing multiple upcoming catalysts, and Deutsche Bank upgrading alternative asset manager Ares to Buy, calling recent AI-related fears "overblown."
While Friday’s surge provided relief, the S&P 500 still posted a slight weekly loss of 0.3%, and the Nasdaq fell about 2%, highlighting the volatility that has characterized the start of 2026 as investors recalibrate expectations around AI, interest rates, and economic resilience.
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