Stocks Rally as AI-Fueled Worries Ease

The S&P 500 Index ($SPX) (SPY) today is up +0.50%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.75%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.90%.  March E-mini S&P futures (ESH26) are up +0.45%, and March E-mini Nasdaq futures (NQH26) are up +0.87%.

Stock indexes are moving higher today, recovering some of Monday’s sharp losses.  A rebound in software companies and chipmakers today from Monday’s rout is lifting the broader market.  Stocks tumbled on Monday amid US trade uncertainty and concerns about the disruptive impact of artificial intelligence, after Citrini Research published a report outlining the potential risks it could pose to various segments of the global economy.

Stocks added to their gains today after the Conference Board US Feb consumer confidence index rose by +2.2 to 91.2, stronger than expectations of 87.1.   

President Trump’s new 10% global tariffs went into effect today after the Supreme Court struck down his global “reciprocal” tariffs last Friday. Mr. Trump subsequently threatened to raise the global tariff rate to 15%, and an administration official said the White House is working on a formal order to implement that higher rate, but the timeline for its implementation has not been finalized.  Mr. Trump is applying the 10% baseline levy under Section 122 of the 1974 Trade Act, which allows the president to impose the charge for 150 days without congressional approval. 

Geopolitical risks are a negative for stocks.  US-Iran nuclear talks are scheduled to resume on Thursday in Geneva, and Iranian Foreign Minister Araghchi said he saw a “good chance” of a diplomatic solution to the standoff over his country’s nuclear program. Last Friday, President Trump said that he’s considering a limited military strike on Iran to ramp up pressure on the country to strike a deal over its nuclear program, and that he thought 10 to 15 days was “pretty much” the “maximum” he would allow for negotiations to continue.

The US Dec S&P composite-20 home price index rose +0.47% m/m and +1.38% y/y, stronger than expectations of +0.30% m/m and +1.30% y/y.

The US Feb Richmond Fed manufacturing survey current conditions unexpectedly fell -4 to -10, weaker than expectations of an increase to -5.

Chicago Fed President Austan Goolsbee said, "I remain optimistic that there can be more rate cuts this year, but that hinges on seeing actual progress on inflation that shows we are on a path back to 2%."

The market’s focus this week will be on corporate earnings results and economic news.  Later tonight, President Trump delivers his State of the Union address.  On Wednesday, Nvidia releases its earnings results after the close.  On Thursday, initial weekly unemployment claims are expected to climb by +10,000 to 216,000.  On Friday, the Feb MNI Chicago PMI is expected to slip -1.8 to 52.2. 

Q4 earnings season is nearing its end, with more than 80% of the S&P 500 companies having reported earnings results.  Earnings have been a positive factor for stocks, with 74% of the 429 S&P 500 companies that have reported beating expectations.  According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth.  Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.

The markets are discounting a 3% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets are higher today.  The Euro Stoxx 50 is up +0.18%.  China’s Shanghai Composite closed up +0.87%.  Japan’s Nikkei Stock 225 closed up +0.87%.

Interest Rates

March 10-year T-notes (ZNH6) today are down -5 ticks.  The 10-year T-note yield is up +1.0 bp to 4.040%.  T-notes are moving lower today as a recovery in stocks has reduced some safe-haven demand for T-notes.  Also, the better-than-expected US Feb consumer confidence report is undercutting T-note prices.  In addition, supply pressures are weighing on T-notes, as the Treasury will auction $211 billion of T-notes and floating-rate notes this week, beginning with today’s $69 billion auction of 2-year T-notes.

European government bond yields are mixed today.  The 10-year German bund yield fell to a 2.75-month low of 2.696% and is down -0.1 bp to 2.710%.  The 10-year UK gilt yield rebounded from a 14.25-month low of 4.291% and is up +0.5 bp to 4.320%.

Eurozone Jan new car registrations fell -3.9% y/y to 800,000, the largest decline in seven months.

Swaps are discounting a 2% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.

US Stock Movers

Software stocks are rebounding today, led by a +12% jump in Thomson Reuters (TRI) after the company said it reached one million professional users of CoCounsel, its legal and business artificial intelligence tool, and announced that it was working with Anthropic’s Claude model.  Also, Salesforce (CRM) is up more than +4% to lead gainers in the Dow Jones Industrials, and Cadence Design Systems is up more than +4%.  In addition, Adobe (ADBE) is up more than +3%, and Oracle (ORCL), Service Now (NOW), and Intuit (INTU) are up more than +2%. Finally, CrowdStrike Holdings (CRWD) and Autodesk (ADSK) are up more than +1%. 

Advanced Micro Devices (AMD) is up more than +7% to lead chipmakers higher after Meta Platforms said it will deploy data center gear based on processors from AMD in a deal worth “double-digit billion” dollars per gigawatt.  Also, ARM Holdings Plc (ARM) is up more than +4%, and Intel (INTC) is up more than +3%.  In addition, NXP Semiconductors NV (NXPI) and Microchip Technology (MCHP) are up more than +2%, and Analog Devices (ADI), Micron Technology (MU), KLA Corp (KLAC), Marvell Technology (MRVL), and Texas Instruments (TXN) are up more than +1%. 

Palvella Therapeutics (PVLA) is up more than +34% after stating a late-stage trial of its experimental therapy for lymphatic malformations met its main goal.

Keysight Technologies (KEYS) is up more than +19% to lead gainers in the S&P 500 after reporting Q1 adjusted EPS of $2.17, stronger than the consensus of $1.99, and forecasting Q2 adjusted EPS of $2.27 to $2.33, well above the consensus of $1.91. 

Henry Schein (HSIC) is up more than +6% after reporting Q4 net sales of $3.44 billion, better than the consensus of $3.35 billion.

Home Depot (HD) is up more than +3% to lead gainers in the Dow Jones Industrials after reporting Q4 comparable sales unexpectedly rose +0.4%, better than the consensus of a decline of -0.36%. 

Qualcomm (QCOM) is up more than +3% after Loop Capital Markets upgraded the stock to buy from hold with a price target of $185. 

Genuine Parts Co (GPC) is up more than +3 after Raymond James upgraded the stock to strong buy from market perform with a price target of $145. 

BWX Technologies (BWXT) is up more than +2% after reporting Q4 revenue of $885.8 million, better than the consensus of $837.5 million, and forecasting full-year revenue of $3.75 billion, above the consensus of $3.68 billion.

Ziff Davis (ZD) is down more than -14% after reporting Q4 adjusted EPS of $2.56, weaker than the consensus of $2.70.

Whirlpool (WHR) is down more than -8% after announcing a concurrent separate underwritten public offerings of shares of common stock and depositary shares, each representing a 1/20^th interest in a share of newly issued Series A Mandatory Convertible Preferred stock. 

Option Care Health (OPCH) is down more than -7% after forecasting full-year revenue of $5.8 billion to $6.0 billion, the midpoint below the consensus of $5.95 billion.

Expeditors International of Washington (EXPD) is down more than -6% to lead losers in the S&P 500 after reporting Q4 operating income of $250.9 million, weaker than the consensus of $253.4 million.

Oneok (OKE) is down more than -5% after reporting Q4 adjusted Ebitda of $2.15 billion, below the consensus of $2.16 billion.

Planet Fitness (PLNT) is down more than -5% after forecasting 2026 adjusted Ebitda of $607 million, below the consensus of $621.9 million.

Cable One (CABO) is down more than -5% after BNP Paribas downgraded the stock to underperform from neutral with a price target of $80. 

Diamondback Energy (FANG) is down more than -3% to lead losers in the Nasdaq 100 after reporting Q4 adjusted EPS of $1.74, below the consensus of $2.00. 

Earnings Reports(2/24/2026)

American Tower Corp (AMT), Axon Enterprise Inc (AXON), Constellation Energy Corp (CEG), CoStar Group Inc (CSGP), EOG Resources Inc (EOG), Expeditors International of Washington Inc  (EXPD), Fidelity National Information (FIS), First Solar Inc (FSLR), GoDaddy Inc (GDDY), Henry Schein Inc (HSIC), Home Depot Inc/The (HD), HP Inc (HPQ), Keurig Dr Pepper Inc (KDP), MercadoLibre Inc (MELI), Mosaic Co/The (MOS), NRG Energy Inc (NRG), Realty Income Corp (O), Workday Inc (WDAY).