Stocks Roar Back as Beaten-Down Tech Sector Rebounds

The S&P 500 Index ($SPX) (SPY) on Friday closed up +1.97%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +2.47%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +2.15%.  March E-mini S&P futures (ESH26) rose +1.92%, and March E-mini Nasdaq futures (NQH26) rose +2.07%.

Stock indexes rallied sharply on Friday, with the Dow Jones Industrials posting a new all-time high.  Recently beaten-down chipmakers, software companies, and AI-infrastructure stocks surged on Friday on dip buying as they recovered some of this week's sharp losses.  Stock indexes added to their gains on Friday after the University of Michigan US Feb consumer sentiment index unexpectedly rose to a 6-month high.

On the negative side of the market, Amazon.com fell more than -5% after the company announced plans to spend $200 billion this year on data centers, chips, and other equipment, sparking concern that its huge bet on artificial intelligence may not pay off in the long run.

The University of Michigan US Feb consumer sentiment index unexpectedly rose +0.9 to a 6-month high of 57.3, stronger than expectations of a decline to 55.0.

The University of Michigan US Feb 1-year inflation expectations fell to a 13-month low of 3.5%, weaker than expectations of no change at 4.0%. The Feb 5-10 year inflation expectations ticked up to 3.4%, stronger than expectations of no change at 3.3%.

US Dec consumer credit rose by +$24.045 billion, stronger than expectations of +$8.000 billion and the largest increase in a year.

Fed comments on Friday were mixed for stocks and bonds.  On the positive side, Fed Vice Chair Philip Jefferson said he was "cautiously optimistic" about the US economy's outlook and that strong productivity growth could help return inflation to the Fed's 2% target.  Conversely, Atlanta Fed President Raphael Bostic said, "It's paramount for the Fed to keep monetary policy in a restrictive posture so that we get inflation back to 2%." Also, 

Bitcoin (^BTCUSD) recovered from a 1.25-year low on Friday and surged by more than +11% to lift cryptocurrency-exposed stocks.  Bitcoin is recovering from a selloff that briefly dragged it down more than 50% from its October record high.  According to Coinglass data, investors pulled $434 million from US Bitcoin ETFs on Thursday, and about $2.1 billion in long positions in cryptocurrencies were liquidated over the past 24 hours. 

Q4 earnings season is in full swing, as more than 150 of the S&P 500 companies reported earnings this week.  Earnings have been a positive factor for stocks, with 79% of the 293 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 19% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets settled mixed on Friday.  The Euro Stoxx 50 closed up by +1.23%.  China's Shanghai Composite closed down -0.25%.  Japan's Nikkei Stock 225 closed up +0.81%.

Interest Rates

March 10-year T-notes (ZNH6) on Friday closed down by -0.5 of a tick.  The 10-year T-note yield rose +2.2 bp to 4.202%.  Mar T-notes fell from a 3-week high on Friday, and the 10-year T-note yield climbed from a 3-week low of 4.156%.  T-notes gave up an early advance and posted modest losses on Friday after a sharp rally in stocks reduced safe-haven demand for T-notes.  Also, the unexpected increase in the University of Michigan US Feb consumer sentiment index to a 6-month high weighed on T-notes.  In addition, hawkish comments on Friday from Atlanta Fed President Raphael Bostic undercut T-note prices when he said, "It's paramount for the Fed to keep monetary policy in a restrictive posture." 

European government bond yields were mixed on Friday.  The 10-year German bund yield rebounded from a 2.5-week low of 2.812% and finished unchanged at 2.842%.  The 10-year UK gilt yield fell by -4.4 bp to 4.514%.

German Dec industrial production fell -1.9% m/m, weaker than expectations of -0.3% m/m and the biggest decline in four months.

German trade news was better than expected as Dec exports rose +4.0% m/m, stronger than expectations of +1.1% m/m and the biggest increase in 4 years.  Dec imports rose +1.4% m/m, stronger than expectations of +0.2% m/m.

Swaps are discounting a 3% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.

US Stock Movers

Chip makers and AI-infrastructure stocks rallied on Friday as they recovered some of this week's sharp losses.  ARM Holdings Plc (ARM) and Super Micro Computer (SMCI) closed up more than +11%, and Nvidia (NVDA) closed up more than +8% to lead gainers in the Dow Jones Industrials.  Also, Advanced Micro Devices (AMD), KLA Corp (KLAC), Lam Research (LRCX), and Marvel Technology (MRVL) closed up more than +8%.  In addition,Broadcom (AVGO) closed up more than +7%, and Applied Materials (AMAT) closed up more than +6%.  Finally, Seagate Technology Holdings (STX) closed up more than +5%, and Intel (INTC) and ASML Holding NV (ASML) closed up more than +4%. 

Cryptocurrency-exposed stocks rallied on Friday as they recovered some of this week's sharp losses, after Bitcoin (^BTCUSD) recovered from a 1.25-year low and surged more than +11%.  Strategy (MSTR) closed up more than +26% to lead gainers in the Nasdaq 100, and MARA Holdings (MARA) closed up by more than +22%.  Also, Riot Platforms (RIOT) closed up by more than +19%, and Galaxy Digital Holdings (GLXY) closed up by more than +16%.  In addition, Coinbase Global (COIN) closed up by more than +12%. 

Bill Holdings (BILL) closed up more than +36% after reporting Q2 adjusted EPS of 64 cents, better than the consensus of 56 cents, and raising its full-year adjusted EPS forecast to $2.33 to $2.41 from a previous forecast of $2.11 to $2.25, above the consensus of $2.23. 

Roblox (RBLX) closed up more than +9% after reporting Q4 bookings of $2.22 billion, better than the consensus of $2.09 billion, and forecasting full-year bookings of $8.28 billion to $8.55 billion, stronger than the consensus of $8.05 billion.

Gen Digital (GEN) closed up more than +7% after forecasting full-year adjusted EPS of $2.54 to $2.56, stronger than the consensus of $2.54.

Caterpillar (CAT) closed up more than +6% after CICC initiated a recommendation of outperform on the stock with a price target of $800.

Vistra Corp (VST) closed up more than +4% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $205.

Estee Lauder (EL) closed up more than +2% after Citigroup upgraded the stock to buy from neutral with a price target of $120. 

Molina Healthcare (MOH) closed down by more than -25% to lead losers in the S&P 500 after reporting an unexpected Q4 loss of -$2.75 EPS versus expectations of a +41 cent profit, and forecasting full-year adjusted EPS of at least $5.00, well below the consensus of $13.71. 

Stellantis NV (STLA) closed down more than -23% after it said a business reset resulted in charges of around 22.2 billion euros for the second half of 2025, about double the market consensus. 

Doximity (DOCS) closed down more than -16% after forecasting full-year revenue of $642.5 million to $643.5 million, weaker than the consensus of $645.6 million.   

Illumina (ILMN) is down more than -9% after reporting Q4 adjusted gross margin of 67%, below the consensus of 68.1%. 

Amazon.com (AMZN) closed down more than -5% to lead losers in the Nasdaq 100 after announcing plans to spend $200 billion this year on data centers, chips, and other equipment, sparking concerns that its huge bet on artificial intelligence may not pay off in the long run.

Centene (CNC) closed down more than -3% after forecasting full-year revenue of $186.5 billion to $190.5 billion, below the consensus of $192.72 billion. 

Hims & Hers Health (HIMS) closed down more than -2% after FDA Commissioner Makary said his agency will take "swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products," after Hims on Thursday launched a cheaper copycat version of the Wegovy weight-loss pill. 

Earnings Reports(2/9/2026)

AECOM (ACM), Amentum Holdings Inc (AMTM), Amkor Technology Inc (AMKR), Apollo Global Management Inc (APO), Arch Capital Group Ltd (ACGL), Becton Dickinson & Co (BDX), Brixmor Property Group Inc (BRX), Cincinnati Financial Corp (CINF), Cleveland-Cliffs Inc (CLF), CNA Financial Corp (CNA), Corebridge Financial Inc (CRBG), Dynatrace Inc (DT), Kilroy Realty Corp (KRC), Kyndryl Holdings Inc (KD), Loews Corp (L), Medpace Holdings Inc (MEDP), ON Semiconductor Corp (ON), Principal Financial Group Inc (PFG), Simpson Manufacturing Co Inc (SSD), UDR Inc (UDR), Vornado Realty Trust (VNO), ZoomInfo Technologies Inc (GTM).