Dow Jones recovers nearly 50% of Monday’s sell-off as software, tech shares see relief rally

Benchmark indices on Wall Street staged a relief rally on Tuesday after Monday’s AI disruption-led rout as tech stocks saw a rebound along with improved consumer sentiment allayed some fears, at least until the next worry.The Dow Jones gained 370 points, recovering nearly 50% of what it lost on Monday, while the S&P 500 and Nasdaq gained 0.7% and 1.1% each. Gains on the Dow Jones were led by Home Depot, which gained 2% after its first earnings beat in a year, along with a small rebound in IBM, whose shares advanced nearly 3% after their biggest single-day fall in 25 years on Monday.

Gains in the tech stocks were led by AMD, which surged nearly 9% after signing a multi-year partnership with Meta for deploying as much as 6 GW of AMD’s graphics processing units for AI data centers. Meta will also be making an investment in AMD via performance-linked warrants for up to 160 million shares.
Software stocks, which have been in the eye of the storm due to Anthropic’s tools were also on the mend with Salesforce rising 4% on hopes that these companies will become enablers for AI and not allow the latter to take their place. ServiceNow shares rose 1%, as did the iShares Expanded Tech-Software Sector ETF, which rose 2%. Anthropic also highlighted that Claude integrates and not displaces existing systems.“AI disruption risk is not new information, but the catastrophizing seems overdone,” said Andrew Tyler, who runs the Global Market Intelligence team at JPMorgan Chase & Co.

Gold and Silver prices cooled off slightly in the spot market, while Brent Crude remained above the mark of $71 per barrel.

On the macro front, US Consumer Confidence rose in February on hopes of better prospects for the economy, the job market and incomes. The gauge increased to 91.2 from 89 in January, surpassing all but one estimate in the Bloomberg survey of economists.

All eyes now will be on US President Donald Trump’s State Of The Union Address and post-market hour results from Nvidia and Salesforce.