A rebound in big tech and upbeat pockets of earnings have steadied risk sentiment, with investors watching whether the Fed’s latest minutes validate expectations for rate cuts later this year.
U.S. stock futures pointed higher Wednesday as investors rotated back into technology after a bruising stretch that hit software and AI-adjacent names hardest, while Treasury yields hovered near recent lows. The tone improved as volatility measures eased and dip-buying returned to mega-cap and semiconductor leaders, helping lift broader index futures despite lingering concerns that corporate AI spending could be peaking rather than accelerating.
In premarket movers, a strong earnings-and-guidance print from Analog Devices helped spark a rally in chip-linked stocks, while Garmin also surged on results and outlook. Not every tech bellwether joined the bounce: Palo Alto Networks slid after investors focused on forward profitability concerns despite a solid quarter.
The AI trade remained at the center of the tape. NVIDIA (NVDA) rose as deal chatter and renewed demand signals supported the idea that hyperscalers are still prioritizing high-end GPUs, even as buy-side skepticism grows around the durability of AI capex cycles. The push-pull has increasingly split the market between firms with near-term monetization and those priced for far more ambitious adoption curves.
Overseas, Europe and Japan traded higher in a thin Asia session marked by Lunar New Year closures in several markets, while commodity prices firmed—an added variable for inflation expectations and central-bank timing. Investors’ next major U.S. catalyst is the release of the Federal Reserve’s meeting minutes, which could clarify how close policymakers are to declaring victory on inflation—and how sensitive they are to any re-acceleration in energy or services prices.
For equity investors, the near-term question is whether the rebound broadens beyond a handful of AI winners. So far, price action suggests traders are willing to re-engage—so long as rates stay contained and earnings deliver enough “real economy” follow-through to justify premium multiples in the growth complex.
