Why US stock market suddenly surging after big crash today: Dow Jones, S&P 500 and Nasdaq turn green after sharp sell-off on inflation and AI fears

US stock market surging today: The US stock market is moving higher today after fresh inflation data came in cooler than expected. The Dow Jones Industrial Average is up 124 points, or 0.25%, at 49,576.63. The S&P 500 has gained 20 points, or 0.30%, to 6,853.17. The Nasdaq Composite is up modestly by 0.07% at 22,612.95.

The catalyst is clear. The Bureau of Labor Statistics reported that the Consumer Price Index rose just 0.2% in January. Economists were expecting a 0.3% monthly increase. On a yearly basis, inflation stands at 2.4%, below the 2.5% forecast. Core CPI, which excludes food and energy, rose 0.3% month over month and 2.5% year over year, matching expectations.

That softer headline number is easing fears that inflation is re-accelerating. It is also pushing Treasury yields lower. The 10-year Treasury yield has dropped to 4.06%, down nearly 4 basis points. The 2-year yield is at 3.41%, also sharply lower. Lower yields typically support stock market valuations, especially in growth and technology sectors.

Markets, however, remain volatile as artificial intelligence disruption fears ripple through multiple sectors.

Dow, S&P 500 and Nasdaq rebound on softer inflation data

The stock market reaction was immediate. The Dow Jones Industrial Average rose 0.25%. The S&P 500 added 0.30%. The Nasdaq Composite gained 0.07%, trimming earlier weekly losses.

Despite Friday’s rebound, all three major averages remain on track for weekly declines. The S&P 500 and Dow are down more than 1% for the week. The Nasdaq is off roughly 2%. The recent pullback reflects concerns over strong payroll data earlier in the week and uncertainty around Federal Reserve policy direction.
Market strategists said the inflation report offers relief but does not dramatically shift the rate outlook. Policy expectations remain steady. Inflation remains above target. But the data reduces fears of reacceleration.Treasury yields reflected that view. The 5-year yield fell to 3.618%. The 30-year yield declined to 4.704%. Lower yields ease financial conditions and improve equity valuations, particularly in rate-sensitive sectors like technology and real estate.

AI disruption fears hit financials, real estate and media stocks

Artificial intelligence disruption concerns have widened beyond technology stocks. Investors are aggressively re-pricing companies seen as potential “AI losers.” The divergence between AI beneficiaries and traditional sectors is growing.

Financial stocks have been under pressure. Charles Schwab shares are down 10% this week. Morgan Stanley has fallen 6%. Software company Workday dropped 10% over the same period. Commercial real estate firm CBRE has declined 17% week to date.

Media stocks were not spared. Walt Disney shares are down 3% for the week. Netflix has slid 7%. Investors are questioning revenue durability in industries vulnerable to automation and AI-driven cost disruption.

Barclays strategist Emmanuel Cau noted that markets are showing “no mercy” to companies perceived to be exposed to AI risk. The rotation reflects shifting capital flows toward semiconductor and infrastructure players viewed as AI enablers.

Semiconductor stocks remain a key focus. Applied Materials jumped 12% after reporting strong earnings and issuing an upbeat outlook. The move underscores continued investor confidence in AI-related chip demand.

Meanwhile, leveraged semiconductor ETFs such as SOXL gained 1.51%, while bearish semiconductor funds like SOXS slipped, reflecting positive sentiment in chip stocks.

Today’s hot stocks: Rivian, Corsair, Intel and Nvidia in focus

Stock-specific moves were sharp. Rivian Automotive surged 20% to $16.81 on heavy volume of 53 million shares. Corsair Gaming skyrocketed nearly 60% to $7.32. Moolec Science jumped 85%, though still far below its 52-week high of $157.05.

Intel gained 1.81% to $47.32. Ford rose 2.06% to $14.13, near its 52-week high of $14.50. These gains reflect renewed risk appetite after the inflation data.

Nvidia, however, slipped 2.05% to $183.10 despite strong long-term AI demand. The stock remains well above its 52-week low of $86.62 but below its high of $212.19. Investors appear to be rotating selectively within the AI trade.

Pinterest plunged 21.79% to $14.50 after disappointing fourth-quarter results and weak forward guidance. DraftKings dropped 13.35% to $21.80. Lloyds Banking Group fell 4.21%. Earnings misses are being punished swiftly in the current environment.

Airbnb rose 6% following upbeat guidance, reinforcing the trend that strong earnings execution continues to drive stock price resilience.

Bitcoin, gold and commodities

The rally extended beyond stocks. The Nasdaq Crypto Index climbed 4.27%. Bitcoin surged 4.13% to $68,895. Ether rose 5.28% to $2,047.69. The move suggests renewed appetite for risk assets as inflation data calms rate fears.

Gold gained 1.10% to $5,002.80, reflecting ongoing hedging demand. Silver rose 1.69%. Meanwhile, oil prices were relatively stable. WTI crude traded at $62.69 per barrel, down slightly. Brent crude stood at $66.50.

Natural gas slipped modestly to $3.21.

The combination of lower Treasury yields, stable commodity prices and rising cryptocurrencies signals improved market sentiment, though not full risk-on momentum.

FAQs:

1. Why is the US stock market up today despite weak weekly performance?

The Dow Jones rose 124 points and the S&P 500 gained 0.30% after January CPI increased just 0.2%, below the 0.3% forecast. That softer inflation data reduced immediate Federal Reserve rate hike fears. Treasury yields fell sharply, with the 10-year yield dropping to 4.06%. Lower yields improve equity valuations. Investors reacted to cooling inflation, not weekly losses.

2. Does lower CPI mean the Federal Reserve will cut interest rates soon?

Annual inflation slowed to 2.4%, still above the Fed’s 2% target. Core CPI came in at 2.5% year over year. Markets saw relief, but not a policy pivot. Bond yields declined, yet rate cut expectations did not surge. The data reduces tightening pressure. It does not guarantee near-term interest rate cuts.

3. Why are AI disruption fears hurting financial and media stocks?

Charles Schwab is down 10% this week. Morgan Stanley fell 6%. CBRE dropped 17%. Investors are repricing companies seen as vulnerable to artificial intelligence disruption. Capital is rotating into semiconductor and AI infrastructure stocks. Markets are rewarding AI beneficiaries. They are penalizing perceived AI laggards.

4. Why did Bitcoin and crypto prices surge with the stock market?

Bitcoin jumped 4.13% to nearly $69,000 after the CPI report showed inflation at 0.2% for January. The Nasdaq Crypto Index climbed 4.27%. Falling Treasury yields increased risk appetite. Softer inflation weakens the case for aggressive rate hikes. That supports both equities and digital assets in the short term.