Dow leads S&P 500, Nasdaq higher as Wall Street bounces back from AI meltdown

Dow leads S&P 500, Nasdaq higher as Wall Street bounces back from AI meltdown

by

U.S. stocks rose on Friday, set to bounce back from a bruising week in tech, as Wall Street reassessed concerns about the impact of AI disruption and the risks of big Big Tech spending.

The Dow Jones Industrial Average (^DJI) led the way higher, rising more than 1.5%, or more than 700 points. The S&P 500 (^GSPC) rose 1%, while the Nasdaq Composite (^IXIC) rose about 0.9% as the indexes began to pull back strong closing losses.

Wall Street looks to end the week with a rebound as Big Tech CEOs and analysts shake off concerns about the impact of new AI tools on legacy technology. But the S&P 500 and Nasdaq are still poised for weekly losses after slipping into negative territory for 2026.

The tentative risk tone extended beyond stocks as bitcoin (BTC-USD) climbed steadily back above $68,000 after hitting a 16-month low overnight. But the biggest cryptocurrency is still on track for its worst weekly performance since 2022 after wiping out all of its gains following Trump’s election this week.

Strategy (MSTR), one of the companies most affected by the crypto crisis, disclosed a loss for the quarter. The results initially weighed on its stock, but shares surged more than 13 percent on Friday as bitcoin rallied and Strategy’s CEO downplayed concerns about debt service risks.

Some tech gloom persisted as shares of Amazon ( AMZN ) fell 9%. In its earnings, the major cloud provider outlined plans for a massive increase in spending in 2026 to at least $200 billion, even as the forecast for operating income fell.

Elsewhere, Stellantis ( STLA ) warned it would take a charge of more than 22 billion euros ($26 billion) in a plan to reduce EV momentum. Shares of the Jeep maker fell more than 20 percent on Wall Street and in Milan ( STLAM.MI ), adding to a picture of electric vehicle malaise painted by this week’s $60 billion write-off for Chinese carmaker BYD ( BYDDF, 1211.HK ).

In commodities, silver (SI=F) rose but broadly resumed its decline as Chinese selling continued ahead of the national holiday.

Looking ahead, the release of the closely watched January jobs report, originally scheduled for Friday, has been pushed back to Wednesday next week. Fresh signs of trouble in the labor market emerged in recent days as job openings fell to their lowest level since 2020 and layoff announcements rose.

LIVE 11 updates

  • Consumer sentiment hits its highest level since August, but is down 11% from last year

    Yahoo Finance’s Brooke DiPalma reports:

    Read more here.

  • Nvidia Shares Rise Nearly 5% As Big Tech’s Capital In 2026 Will Surpass $600 Billion

    Shares of Nvidia ( NVDA ) rose 4.6% in morning trading Friday as the chipmaker was set to benefit from more than $600 billion in capital spending planned by the four Big Tech hyperscalers: Microsoft ( MSFT ), Amazon ( AMZN ), Alphabet ( GOOGL ) and Meta ( META ).

    Amazon said Thursday it will spend about $200 billion in 2026.

    On Wednesday, Alphabet said its investments would fall between $175 billion and $185 billion.

    The previous week, Meta estimated it would spend between $115 billion and $135 billion. Microsoft didn’t share its spending outlook for the full year, but if it continues to spend at the same rate as the first half of fiscal 2026 — which began in July 2025 — cloud provider Azure would see about $145 billion in investments.

    At the low end of that range, the four would spend about $635 billion this year, marking an increase of about 67 percent from the companies’ $381 billion in spending in 2025. At the high end of the guidance, the group would spend about $665 billion, or a 74 percent increase from the previous year.

    “It’s all going to go to Nvidia,” DA Davidson analyst Gil Luria said in an interview with Yahoo Finance on Friday morning regarding the investment numbers.

    He said that while Nvidia shares are down about 4% over the past three months — as are fellow AI chip designers Broadcom ( AVGO ) and AMD ( AMD ), which are down about 9% and 14%, respectively, over that time frame — investors will likely start again “giving credit to the companies that are capturing all the profits” from Big Tech’s investments in AI.

  • Laura Bratton

    Stocks rise at the market open

    U.S. stocks rose early Friday on cautious optimism for a rebound after a week of tech disappointment.

    The S&P 500 (^GSPC) rose 0.5%, while the Nasdaq Composite (^IXIC) added about 0.2%, recovering from early premarket declines. The Dow Jones Industrial Average (^DJI) also rose 0.8% after sharp losses in stocks on Thursday.

  • Hims & Hers stocks, Novo Nordisk rise as FDA targets copycat drugs

    Shares of Hims & Hers Health ( HIMS ) and Novo Nordisk ( NVO ) saw a reversal in fortunes Friday morning after the FDA announced a crackdown on GLP-1 mimic drugs amid fierce competition in the weight loss drug market.

    On Friday, US Food and Drug Administration (FDA) Commissioner Marty Makary said on X that the agency would take “swift action against companies that mass market illegal copycat drugs.”

    The move came just after Hims & Hers announced it would launch a combination diet pill to rival Novo Nordisk’s drug Wegovy for $49-$99. Compounded drugs are customized drugs that are not approved by the FDA and are sometimes considered “dupes” of brand-name drugs.

    Shares in Novo Nordisk fell on the news, and the company immediately threatened legal action, saying in a statement: “Novo Nordisk will take legal and regulatory action to protect patients, our intellectual property and the integrity of the standard US drug approval framework.”

    After the FDA appeared to weigh in on the issue, shares of Hims & Hers Health ( HIMS ) fell about 7%, while shares of Novo Nordisk ( NVO ) rose 7%.

  • Jenny McCall

    Pre-Trade Trend Tickers: Molina, Doximity and Coty

    Molina Healthcare (MOH) Shares fell 28% before the bell on Friday after the 2026 profit forecast fell short of analysts’ expectations. The US health insurer said medical costs have risen in its government-backed plans.

    Doximity (document) The stock fell 30% in after-hours today after it cut its full-year sales outlook.

    Coty (COTY) Shares were down 13% before the bell on Friday. The beauty brand withdrew its guidance for the fiscal year on Friday.

  • Crypto pessimism is setting in, but Michael Saylor is still holding on

    Shares of Strategy ( MSTR ) rose 6% Friday morning, defying bitcoin’s continued slide and the stock’s 17% drop on Thursday.

    As of Thursday afternoon, the company reported holding 713,502 bitcoins, with an average purchase price of $76,052, about 20% more than bitcoin trades for. Strategy reported an operating loss of $17.4 billion, compared with $1 billion in the same period in 2024.

    With bitcoin priced at $66,227 on Friday, the company is still underwater on its investment amid a crypto selloff. But Strategy’s Michael Saylor urges the crypto faithful to stay strong, reiterating their mantra and battle cry: “HODL.”

    Yahoo Finance’s Hamza Shaban writes in today’s Morning Brief how Strategy’s problems have been for years:

    Read more here.

  • Stellantis stock craters after taking a $26 billion EV charge

    Jeep maker Stellantis ( STLA , STLAM.MI ) warned on Friday it would book a 22.2 billion euro ($26 billion) charge as it slows its push for electric vehicles.

    Shares fell more than 20 percent in premarket trading on Wall Street and in Milan, where trading was briefly halted. They fell as much as 24 percent in Italy, the biggest decline on record for the Peugeot and Fiat carmaker, to wipe more than 5 billion euros from its market capitalization.

    Bloomberg reports:

  • Jenny McCall

    Reddit jumps after posting upbeat guidance and positive Q4 results

    Shares of Reddit ( RDDT ) rose 7% before the bell on Friday after posting better-than-expected fourth-quarter results and issuing positive recommendations, helped by AI tools to bring more marketers to the platform.

    Investing.com reports:

    Read more here.

  • Jenny McCall

    Roblox is forecasting strong annual bookings as the gaming platform’s momentum grows

    Reuters reports:

    Read more here.

  • Low liquidity boosts silver price after steep decline

    Bloomberg reports:

    Read more here.

  • Bitcoin’s decline hits retail investors who expect a pro-crypto government edge

    Bloomberg reports:

    Read more here.

Leave a Comment