The Dow Jones Industrial Average rose 1,050 points, or 2.15%, to close at 49,958.72 on Friday, a fresh record high Friday after stocks rebounded sharply following Thursday’s technology-led sell-off. The S&P 500 rose 1.2% to 6,880.13, while the Nasdaq Composite rose 1.0% to 22,765.45. The mighty rebound came as investors reassessed concerns about artificial intelligence disruption and the impact of massive spending plans by Big Tech companies, with chipmakers and financial firms leading the market.
Chipmakers bounce back as AI infrastructure spending sparks fear
Semiconductor stocks rallied strongly on Friday as investors put aside concerns about the sustainability of artificial intelligence investments. Nvidia Corporation (NVDA) rose about 5%, marking a gain after falling more than 1% in the previous session. Advanced Micro Devices Inc. (AMD) jumped 5.1%, Broadcom gained 3.5% and Micron Technology gained 4%. The rebound came as analysts highlighted that Big Tech’s combined capital spending plans of more than $630 billion in 2026 represent massive demand for AI chips and data center infrastructure. Despite near-term concerns about when AI investments will pay off, the spending spree is expected to benefit the semiconductor makers that supply the hardware that powers the AI ​​build.
Amazon shares a crater after announcing $200 billion in artificial intelligence spending
Amazon ( AMZN ) fell nearly 9% after the e-commerce and cloud giant announced plans to spend about $200 billion on capital expenditures in 2026, well above the $144 billion expected by analysts. The massive spending plan, focused on data centers, chips and networking equipment to run artificial intelligence workloads, spooked investors who questioned whether Amazon Web Services could generate enough profits to justify the unprecedented level of investment. CEO Andy Jassy defended the spending during the company’s earnings call, stating that the company has mighty demand signals and is immediately monetizing fresh capacity. However, at least five brokerages lowered their price targets on Amazon following the announcement. The company’s forecast first-quarter operating earnings of $16.5 billion to $21.5 billion also fell low of the $22 billion analysts expected, increasing concerns about near-term profitability.
Financials and industrials are driving the Dow to record highs
Financial and industrial stocks drove the Dow to record highs on Friday, benefiting from a broad market rebound and expectations for continued economic growth. JPMorgan Chase (JPM) rose 3.2% and Bank of America rose 1.6% as bank stocks rose on optimism about lending conditions. Among the industrial names, Caterpillar Inc. (CAT) gained 3.9%, helping the Dow rise. Oracle Corporation ( ORCL ) jumped 4.1% as investors moved past concerns about cloud computing margins. Gains in cyclical sectors reflected a shift away from the most pricey technology names towards more closely related business stocks, continuing a trend that has supported the Dow’s outperformance relative to the Nasdaq in recent weeks.
Despite persistent concerns, consumer sentiment has reached its highest level in six months
The University of Michigan’s preliminary February consumer sentiment index rose to 57.3, up from 56.4 in January and topping economists’ expectations of 55.0. The reading reached its highest level since August 2025, although it remained about 20% below previous year levels and was near historically low readings. The improvement was mainly driven by wealthier Americans with exposure to the stock market, who benefited from gains in stocks, while sentiment stagnated among consumers without stock holdings. Joanne Hsu, the poll’s director, noted that concerns about high prices and increased risk of job loss continue to worry Americans. Inflation expectations for the coming year fell to 3.5% from 4.0% in January, which provided some relief, although historically, overall sentiment remains low.
Health care stocks fall on profit warnings
Molina Healthcare Inc. (MOH) fell 28% after the insurer forecast 2026 adjusted earnings per share of at least $5.00 per share, well below the consensus estimate of $13.71 and less than half of Wall Street’s expectations. The company also announced plans to exit its classic Medicare Advantage Part D prescription drug business in 2027 due to indigent performance. The disappointing outlook, driven by increased medical costs for government-backed health plans and a $2.50 per share enhance from the implementation of the fresh Florida Medicaid contract, has raised concerns about broader pressures from the managed care industry. CEO Joseph Zubretsky characterized 2026 as “the lowest year for Medicaid industry margins” as health care providers grapple with an imbalance between reimbursement rates and rising utilization trends.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock indexes in the world, consists of the 30 stocks most frequently traded in the United States. The index is price-weighted, not capitalization-weighted. It is calculated by summing the prices of the company’s shares and dividing them by the coefficient, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years, it was criticized for not being representative enough because it only tracks 30 conglomerates, as opposed to broader indexes such as the S&P 500.
Many different factors influence the Dow Jones Industrial Average (DJIA). The most critical are the total results of the companies included in the group, disclosed in quarterly reports on the companies’ results. Macroeconomic data from the United States and around the world also matters because it influences investor sentiment. The level of interest rates set by the Federal Reserve (Fed) also affects the DJIA because it influences the cost of borrowing, on which many corporations depend heavily. Therefore, inflation may be a major factor, along with other indicators, that influence Fed decisions.
Dow Theory is a method of identifying the main trend in the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only track trends where both are heading in the same direction. Volume is a confirmatory criterion. The theory uses elements of peak and trough analysis. Dow Theory assumes three phases of a trend: accumulation, when astute money starts buying or selling; public participation when wider society is involved; and distribution when the astute money comes out.
There are many ways to trade the DJIA. One is the exploit of ETFs, which allow investors to trade the DJIA as a single security rather than buying shares of all 30 companies that comprise it. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts allow investors to speculate on the future value of the index, and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to purchase a portion of a diversified portfolio of DJIA stocks, thereby providing exposure to the entire index.
