Wall Street Recovering from AI Sell-Off

Wall Street Rebounds as Tech Stocks Recover; Dow Jumps 370 Points, Nasdaq Gains 1.1%​

Benchmark indices on Wall Street rebounded on Tuesday, recovering from Monday’s sharp sell-off that was triggered by concerns around artificial intelligence disruptions. A revival in technology stocks and improved consumer sentiment helped ease market anxiety, at least temporarily.

The recovery came as investors reassessed the scale of AI-related risks and turned their focus toward earnings updates and macroeconomic signals.

Dow Jones Recovers Half of Monday’s Losses​

The Dow Jones Industrial Average advanced 370 points, clawing back nearly half of its losses from the previous session. Broader benchmarks also moved higher, with the S&P 500 rising 0.7% and the Nasdaq Composite gaining 1.1%.

Gains in the Dow were led by Home Depot, which rose 2% after posting its first earnings beat in a year. IBM also rebounded, climbing nearly 3% following its steepest single-day decline in 25 years on Monday.

AMD Surges on Meta AI Partnership​

Technology stocks led the broader recovery, with Advanced Micro Devices surging nearly 9%. The rally followed a multi-year partnership with Meta Platforms, under which AMD will deploy up to 6 gigawatts of its graphics processing units for AI data centers.

As part of the agreement, Meta will also invest in AMD through performance-linked warrants covering up to 160 million shares, reinforcing investor optimism around AI infrastructure demand.

Software Stocks Stabilize After AI Fears​

Software counters, which had come under pressure due to concerns surrounding AI tools from Anthropic, also showed signs of stabilization.

Shares of Salesforce climbed 4% amid expectations that software firms may enable AI adoption rather than be displaced by it. ServiceNow added 1%, while the iShares Expanded Tech-Software Sector ETF rose 2%.

Anthropic emphasized that its Claude tool integrates with existing systems instead of replacing them, helping temper disruption concerns.

Andrew Tyler, who leads the Global Market Intelligence team at JPMorgan Chase & Co., said the risks associated with AI disruption are not new, suggesting that the market reaction may have been excessive.

Commodities Ease; Consumer Confidence Improves​

In the commodities market, gold and silver prices cooled slightly in the spot segment, while Brent crude held above $71 per barrel.

On the macroeconomic front, US consumer confidence strengthened in February. The index rose to 91.2 from 89 in January, exceeding nearly all estimates in a Bloomberg survey. The improvement was driven by optimism around the economic outlook, employment prospects, and income expectations.

Focus Shifts to State of the Union and Earnings​

Investor attention now turns to US President Donald Trump’s State of the Union Address, along with post-market earnings from Nvidia and Salesforce.

With AI-related volatility still shaping sentiment, upcoming corporate results and policy signals are expected to guide the next phase of market direction.