NEW YORK, Feb 6, 2026, 14:35 (EST)
Stocks snapped back on Friday, reversing course after three straight sessions of selling that dragged down big tech and other risk plays. By 12:10 p.m. ET, the Dow was up 989.72 points, or 2.02%, sitting at 49,898.44. The S&P 500 added 1.56%, while the Nasdaq jumped 1.69%, according to Reuters data. “The market looks like it was getting a bit overdone to the downside,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. 1
This shift is shaking up the AI trade, as investors get choosier about who stands to gain—or lose—going forward. Software stocks have taken the brunt of it this week: ServiceNow has dropped 12%, Salesforce is down 9%. Hardware, the “picks ’n shovels” of AI, is proving more resilient, Reuters said. “Investors are differentiating between who enables AI and who may be disrupted by it,” said Charu Chanana, chief investment strategist at Saxo. 2
Company budgets are reflecting the divide. Alphabet, Microsoft, Amazon, and Meta together are on track to shell out more than $630 billion this year, Reuters reports, most of it aimed at AI. Investors are watching to see if those dollars actually pay off. Amazon alone has lined up $200 billion in spending, with Alphabet just behind at up to $185 billion, and Meta anticipating as much as $135 billion. 3
Chip stocks snapped higher Friday—Nvidia surged roughly 7%, Broadcom tacked on over 5%, and AMD jumped close to 7.5% by late morning. The Philadelphia SE Semiconductor index tracked a 4.6% pop, Reuters noted. Amazon’s downturn still cast a shadow over AI spending, but semis shrugged it off for now. “We’re going to continue to see these ebbs and flows,” said Ben Falcone, managing director at Kayne Anderson Rudnick. 4
Amazon’s latest figures have intensified the conversation. According to Reuters, the company expects its capital expenditures to hit $200 billion in 2026, a significant jump from $131 billion forecast for 2025. Chief executive Andy Jassy tried to put a positive spin on the spending spree: “We are being incredibly scrappy.” D.A. Davidson analyst Gil Luria didn’t mince words: “Amazon has to invest at these levels just to stay in the race.” 5
Crypto snapped back after a sharp selloff the previous day. On Thursday, Bitcoin dropped as low as $63,295.74—its softest showing since October 2024—and was last down 12.6% in that session, Reuters noted. Around $1 billion in bitcoin positions got wiped out over the course of 24 hours, CoinGlass data showed. “It’s clear the crypto market is now in full capitulation mode,” said Nic Puckrin, co-founder of Coin Bureau. 6
U.S. consumer data showed a headline gain, but the details were mixed. The University of Michigan’s Consumer Sentiment Index edged up to 57.3 in early February from 56.4 a month earlier, according to Reuters, with most of the lift coming from households holding the most stocks. “We may have seen the trough in consumer sentiment,” said Oren Klachkin, financial markets economist at Nationwide, though he isn’t betting on a sharp bounce. 7
Oil traders watched developments in Oman, with Iran and the U.S. meeting for nuclear talks that Tehran described as a “good start,” according to Reuters. Iran’s foreign minister signaled more discussions ahead, though Washington imposed new sanctions linked to Iranian petroleum trade—a signal that both diplomatic overtures and pressure tactics are in play. 8
There’s a catch to this rally. Should the AI capex surge fall short on earnings, or if rates don’t budge and funding pressures worsen, the “buy the dip” crowd can snap right back to selling. Crypto’s still on edge, and the Middle East can swing on a headline. That makes Friday’s rebound feel more like a pause than a conclusion.
