US Stocks Rally as Tech Shares Recover and Bitcoin Stabilises
US stocks experienced a significant surge on Friday, with major indices climbing as technology shares rebounded and bitcoin stabilised following recent losses. The Dow Jones Industrial Average jumped an impressive 1,100 points, surpassing the 50,000 mark for the first time ever, as US equities recovered from earlier declines this week.
Market Performance and Key Drivers
The Dow climbed by 2.2 percent, while the S&P 500 gained 1.7 percent and the Nasdaq Composite rose 1.9 percent. Chip stocks were at the forefront of this rally, driven by optimism that companies like Amazon will increase their investments in artificial intelligence infrastructure. Nvidia saw its shares jump 7.3 percent, partially recovering from a weekly loss that had exceeded 10 percent. Broadcom surged 7.5 percent, completely erasing its weekly decline.
These two semiconductor giants were the primary forces lifting the S&P 500, benefiting from expectations of sustained spending by customers diving into artificial-intelligence technology. Amazon announced late on Thursday that it anticipates investing approximately $200 billion this year to capitalise on what it described as 'seminal opportunities like AI, chips, robotics, and low earth orbit satellites.'
Mixed Sentiment and Broader Concerns
Stocks also received a boost from improved US consumer sentiment data. Bitcoin climbed back above the $70,000 threshold, ending a weeks-long slide that had concerned investors. However, this heavy spending by tech giants—similar to announcements from Alphabet a day earlier—is also raising significant concerns among market participants.
Investors are questioning whether these massive expenditures will ultimately translate into substantially higher profits in the future. With these doubts lingering, Amazon's stock actually fell 5.3 percent despite the broader market rally. Even with Friday's strong rebound, the S&P 500 remains on track for its third losing week out of the past four.
Additional Market Pressures and Sector Movements
Beyond worries about AI spending by Big Tech, investors are also concerned that artificial intelligence could potentially take customers away from traditional software companies. These fears intensified after AI firm Anthropic released free tools capable of automating services such as legal work, threatening established business models.
In commodities, metal prices stabilised after experiencing sharp swings earlier in the week. Gold rose 1.9 percent to $4,982 per ounce, while silver gained 0.3 percent. Both precious metals had surged the previous week as investors sought safer assets amid political uncertainty, concerns about expensive US stock valuations, and rising government debt worldwide. By January, the rapid price increases had led some critics to label the rally as unsustainable.
Crypto-Related Stocks Benefit from Bitcoin Rebound
On Wall Street, bitcoin's recovery helped boost stocks with exposure to cryptocurrencies. Robinhood Markets jumped 15 percent, marking the biggest gain in the S&P 500. Coinbase Global rose 11.3 percent, and MicroStrategy, a company focused on acquiring and holding bitcoin, surged an impressive 23.7 percent. This sector performance highlights how digital asset movements continue to influence traditional equity markets.
