Market Rebound Gains Momentum as Chip Stocks and AI Infrastructure Rally

Major US stock indexes extended gains today on the back of a broad-based rebound in semiconductor and artificial intelligence infrastructure stocks. The S&P 500 advanced 0.25%, while the Dow Jones Industrials climbed 0.57% and the Nasdaq 100 rose 0.42%, with March futures pointing to further strength. This recovery comes as technology investors rotated back into beaten-down names after last Friday’s sell-off, signaling renewed appetite for sectors hit hardest in the recent correction.

Tech Sector’s Powerful Recovery Leads the Index Rebound

The semiconductor and AI infrastructure space provided the lift for today’s market rebound, with SanDisk surging more than 7% to lead S&P 500 gainers following a buy-rated initiation from CTBC Securities with a $660 price target. Western Digital, Seagate Technology, and Advanced Micro Devices all rallied more than 3%, while Intel and Lam Research gained over 2%. The sector-wide recovery reflected investor confidence returning to the cornerstone of artificial intelligence buildout, as major cloud and computing infrastructure requirements continue to dominate market narratives.

Strategic Minerals Push Rare-Earth Stocks Higher

A significant policy development boosted rare-earth and critical minerals stocks during today’s session. President Trump’s announcement of a strategic stockpile initiative funded with $12 billion in seed capital—aimed at reducing reliance on Chinese supply chains—triggered a rebound in related equities. USA Rare Earth jumped over 9%, while United States Antimony climbed more than 8%. MP Materials and Critical Metals also benefited, each advancing over 4%. This rally reflects market recognition of long-term supply chain resilience as a strategic priority for the US economy.

Cryptocurrency and Energy Sectors Face Headwinds

While tech-related stocks rebounded strongly, digital asset-exposed equities continued their slide. MicroStrategy, Marathon Digital Holdings, and Galaxy Digital fell more than 3% as Bitcoin plunged 1.29% to trade near recent lows, marking persistent weakness in the cryptocurrency complex that overshadowed broader market gains. Meanwhile, energy producers extended losses as crude oil prices retreated, with WTI dropping sharply amid easing geopolitical tensions after diplomatic developments between the US and Iran. ConocoPhillips, Diamondback Energy, and Occidental Petroleum each declined more than 2%.

Mixed Signals from Global Economic Data Weigh on Sentiment

The rebound in risk assets faced headwinds from troubling economic indicators, particularly from China. The Shanghai Composite fell 2.48% after the January manufacturing PMI unexpectedly slipped 0.8 points to 49.3, signaling contraction versus expectations of stability at 50.1. More concerning, non-manufacturing PMI tumbled to 49.4, marking the steepest pace of contraction in three years and well below the expected increase to 50.3. This weakness in the world’s second-largest economy raised concerns about global growth prospects heading into the critical earnings season.

Fed Policy and Interest Rate Markets Navigate Uncertainty

US Treasury markets remained relatively steady despite the market rebound elsewhere, with 10-year yields rising 1.2 basis points to 4.248%. The slight decline in T-note prices reflected market reaction to the Fed Chair nomination announcement, with President Trump selecting Kevin Warsh—viewed as more hawkish than alternative candidates due to his emphasis on inflation risks during his 2006-2011 tenure as a Fed Governor. However, the sharp decline in crude oil prices provided some support to bonds by reducing inflation expectations. European government bond yields were mixed, with German bunds rising 0.7 basis points while UK gilts fell 2.4 basis points.

Earnings Season Momentum Offsets Macro Headwinds

Q4 earnings season provided a counterbalance to economic concerns, with 150 S&P 500 companies scheduled to report this week. The positive trend in results—78% of the 167 companies reporting so far have beaten expectations—supported the market rebound despite external pressures. Bloomberg Intelligence forecasts S&P earnings growth of 8.4% for Q4, or 4.6% when excluding the Magnificent Seven megacap technology stocks. Additionally, specific stock rebounds like Palantir Technologies (up 3% following a William Blair upgrade) and Oracle (gaining 3% on $45-50 billion capital raise announcement for cloud infrastructure) highlighted earnings-driven opportunities.

Week Ahead: Data, Earnings, and Policy in Focus

Investors face a busy week of economic releases to assess the durability of today’s market rebound. Today’s January ISM manufacturing index is expected to climb 0.6 points to 48.5, followed by Tuesday’s JOLTS job openings report (forecast +104,000 to 7.25 million) and Wednesday’s ADP employment report (+45,000 expected). The January ISM services index is projected to decline 0.3 to 53.5. Friday’s nonfarm payrolls report—expecting +65,000 jobs with unemployment steady at 4.4%—will be critical for Fed rate expectations heading into the March 17-18 policy meeting. Markets are currently pricing just a 13% probability of a 25 basis point rate cut at that meeting, suggesting confidence in the Fed’s steady policy stance.