Software Stocks Stage a Comeback as NVIDIA Hits Three-Month High Ahead of Earnings

Market Overview

U.S. equities mounted a strong rebound yesterday, with the Nasdaq Composite rising more than 1%. What initially appeared to be “AI displacement fears” triggered by Anthropics new tool quickly evolved into a “collaboration opportunity” narrative, propelling software stocks to lead the broader market higher.

Thomson Reuters, which recently announced an expanded strategic partnership with Anthropic, surged more than 11%. FactSet gained nearly 6%, while Salesforce rose over 4%, leading the Dow Jones Industrial Average. IBM, which had suffered its steepest one-day drop in 25 years in the prior session, rebounded nearly 3% as investor sentiment stabilized.

The semiconductor sector delivered strong performance but showed internal divergence:

AI Core Segment:

AMD rallied nearly 9% after confirming a potential multi-year GPU supply agreement with Meta that could be worth tens of billions of dollars over the next five years. NVIDIA extended its winning streak to three consecutive sessions ahead of earnings, closing at a three-month high.

Memory Segment Under Pressure:

Memory chip stocks lagged. SanDisk fell more than 4% after short-selling firm Citron Research publicly disclosed a short position, citing valuation excesses and a lack of competitive moat.

On the macro and FX front, the U.S. Dollar Index remained firm, rebounding toward a four-week high. The Japanese yen weakened sharply, falling more than 1% under dollar strength. Meanwhile, the offshore yuan (CNH) surprised to the upside, breaking below 6.88 against the dollar and reaching a fresh near three-year high for the second time in a week.

U.S. Treasury yields edged higher, weighing modestly on safe-haven assets.

Commodities and Crypto

Precious Metals Pull Back:

Spot gold retreated after posting two consecutive monthly highs, dropping more than 2% intraday on profit-taking. Silver followed suit, though silver futures extended gains for a fifth straight session due to contract rollover dynamics.

Oil and Crypto:

Crude oil failed to sustain its rebound ahead of renewed U.S.–Iran negotiations, reversing gains after an early rally. Bitcoin showed resilience after briefly testing the $65,000 level, rebounding more than 3% and trimming most of its earlier losses.

China ADRs Rebound:

The Nasdaq Golden Dragon China Index rose nearly 1.4%, snapping a brutal eight-session losing streak. GDS Holdings was among the standout performers.

Key Themes Ahead● Labor Market Showing Gradual Stabilization

Data released on February 24 showed that in the four weeks ending February 7, U.S. private employers added an average of 12,750 jobs per week. This marks the fourth consecutive weekly improvement from the early January trough of 4,250.

However, current hiring levels remain well below the late-November 2025 peak of 17,000 to 20,000 weekly additions, suggesting that while stabilization is underway, the labor market has yet to fully recover from its prior slowdown.

● Credit Conditions Echo Pre-2008 Warning Signs

JPMorgan Chase CEO Jamie Dimon cautioned that elevated asset valuations and excessive risk-taking resemble conditions preceding the 2008 financial crisis. He warned that a reversal in the credit cycle could trigger unexpected defaults, with the AI-disrupted software sector potentially among the most vulnerable.

Dimon criticized certain institutions for engaging in reckless behavior in pursuit of short-term profits, thereby compounding systemic risks. He declined to address succession-related questions.

What to Watch (GMT+8)

23:30 ET — U.S. EIA Weekly Crude Oil Inventories (Week Ending February 20)

05:00 ET — NVIDIA Earnings Release