Stock market today: Dow, S&P 500, Nasdaq climb as software stocks lead AI relief rally

Stocks climbed on Tuesday as the software sector rebounded and investors looked ahead at AI chip heavyweight Nvidia (NVDA), which will report earnings on Wednesday.

The Dow Jones Industrial Average (^DJI) rose by nearly 0.8%, while the S&P 500 (^GSPC) added 0.8%. The tech-heavy Nasdaq Composite (^IXIC) gained about 1%.

Share of AMD (AMD) surged after the chipmaker entered a deal to provide Meta (META).

All eyes are on Nvidia’s quarterly results, which could set the tone for AI-related stocks and broader market sentiment.

Investors are also watching President Trump’s State of the Union address tonight for clues on economic and trade policy.

Yahoo Finance’s Pras Subramanian reports:

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Software is finally bouncing.

The sector is clawing back steep losses that have come in seemingly relentless waves — the latest hit Monday, with traders spooked by the now-famous Citrini Research paper.

The good news: Anthropic (ANTH.PVT) is going out of its way to sell the “we partner with software” story, highlighting Claude tie-ups with Thomson Reuters (TRI), FactSet (FDS), Salesforce (CRM) via Slack, and DocuSign (DOCU) across what it calls “work surfaces.”

The earlier investor read was darker — that Claude was coming for the whole workflow layer in corporate America.

TRI is up nearly 12%, on track for its best day since Nov. 2008. FDS is up about 7%, its most since mid-2022.

Still, today’s sea of green doesn’t erase the damage. Most names are still down double digits since the early-February “AI scare” flush.

Today is a step in the right direction — but bottoming is a process, and the turn often starts when the last weak hands finally throw in the towel.

Workday’s (WDAY) quarterly results after the bell this afternoon are likely to draw added scrutiny, as investors look for clues about AI’s impact on the software sector.

Shares of the HR and payroll software firm rebounded 2% on Tuesday after touching a 52-week low in the prior session.

Workday stock is down roughly 39% year-to-date as the AI scare trade has gripped pockets of the market, driven by concerns that AI tools will shrink margins and threaten the pricing models of legacy software providers.

Analysts have lowered their price targets ahead of the company’s quarterly results. Jefferies recently downgraded Workday to ‘Hold’ and slashed its price target to $150 from $325, citing AI-related concerns and execution risks tied to the company’s leadership changes announced earlier this month.

Tesla (TSLA) stock pushed higher on Tuesday afternoon, recovering from Monday’s nearly 3% loss and shrugging off declining European sales, robotaxi competition from Waymo, and a development in a lawsuit over the company’s hiring practices.

In January, Tesla saw its 13th straight month of sales declines in Europe. Tesla electric vehicle registrations (a proxy for sales) in Europe fell to just 8,075 units, a 17% drop compared to a year ago, according to the European Automobile Manufacturers’ Association (ACEA). At the same time, Chinese EV maker BYD (BYDDY) reported sales in Europe jumped 165% to 18,242 units.

On the legal front, Tesla sued California’s Department of Motor Vehicles to reverse a decision that said Tesla falsely advertised its self-driving software’s capabilities, reopening that legal battle after California’s DMV said it would not take action to suspend Tesla’s licenses to sell cars in the state.

Separately, a US judge refused to dismiss a lawsuit against Tesla that accused the company of discriminating against Americans in its hiring practices, Reuters reported.

Tesla stock rose 1.6% in midday trading. Year to date, the stock is down 9.6%.

Spirit Airlines said it has reached an agreement with its creditors that would allow the budget airline to exit bankruptcy proceedings this year.

The company said in a press release that the agreement will “provide Spirit with the financial support needed to finalize its restructuring and complete the remaining changes necessary to optimize the Company’s fleet, network and cost structure.”

The airline intends to exit Chapter 11 bankruptcy proceedings in late spring or early summer.

The announcement comes after the embattled airline has been the subject of multiple merger and acquisition bids over the past few years.

In early 2022, Spirit agreed to merge with Frontier Airlines, controlled by Frontier Group Holdings (ULCC), in a stock-and-cash deal that Spirit ultimately terminated. Frontier made another offer in 2025, which Spirit rejected as the budget airline navigated a bankruptcy-driven restructuring.

Also in 2022, Spirit briefly entered into a merger agreement with JetBlue Airways (JBLU), but the deal was blocked by federal regulators, and JetBlue called off the deal.

Most recently, Reuters reported in December 2025 that Spirit and Frontier were once again eyeing a potential merger.

Yahoo Finance’s Brian Sozzi reports:

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The Conference Board’s consumer confidence index ticked up by 2.2 points in February to a reading of 91.2, signaling an improved outlook of economic conditions even as consumers’ perceptions of the current macro environment skew toward pessimism.

The Expectations Index, which surveys consumers about their views on business conditions, income, and the labor market six months from now, rose by 4.8 points to 72, whereas the Present Situation Index, measuring current conditions, deteriorated by 1.8 points to 120.

Despite the improvement, the consumer confidence index remains well off its November 2024 peak, as the cost of goods and the “low hire, low fire” labor market remain top of mind for consumers.

“Overall, the trend is pretty disturbing,” The Conference Board senior US economist Yelena Shulyatyeva told Yahoo Finance. “Consumers continue to … think that jobs are really hard to get. Month to month, there are drops and improvements, but the trend overall is to the downside.”

Shares in Salesforce (CRM), FactSet Research Systems (FDS), and DocuSign (DOCU) surged on Tuesday after leading AI developer Anthropic (ANTH.PVT) announced new tools developed in collaboration with the two companies.

FactSet picked up roughly 6%, while Salesforce and DocuSign both gained around 5% through mid-morning trading.

In a presentation Tuesday morning, Anthropic unveiled a suite of new plug-ins that the company said can help with investment banking and wealth management tasks like deal review and portfolio analysis, and with HR tasks such as bringing documents into alignment with in-house tone.

Several of the new plug-ins, Anthropic said, were designed in collaboration with those companies.

The positive price action comes just weeks after an early wave of the so-called “AI scare trade” sent shares in software and legal companies plummeting alongside several other industries investors viewed as susceptible to AI disruption.

Federal Reserve Governor Lisa Cook said the Fed’s standard approach to monetary policy may be unable to combat an AI-driven rise in unemployment without increasing inflation, according to reporting by Bloomberg.

“If AI continues to raise productivity, economic growth could remain strong, even as churn in the labor market leads to an increase in unemployment. In a productivity boom such as this, a rise in unemployment may not indicate increased slack,” Cook said Tuesday at an event in Washington.

“As such, our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure.”

Cook’s comments come after other Fed governors have said in recent days that the uptake on AI could push interest rates higher, contrary to President Trump’s repeated overtures for rate cuts.

In comments at an event in New York last week, Fed Governor Michael Barr said he expects that AI is “unlikely to be a reason for lowering policy rates.” Fed Vice Chair Philip Jefferson said earlier in the month that “persistent increases in productivity growth are likely to result in an increase in the neutral rate, at least temporarily.”

The Fed kept rates unchanged at its last meeting in January. As of Thursday morning, traders were pricing in 96% odds that the Fed will do the same at its upcoming meeting in March, leaving interest rates at their current target range of 3.5% to 3.75%.

The US stock market began trading on Tuesday on mixed footing as investors looked to shake off losses led by the “AI scare trade” as President Trump’s new global tariff came into effect.

The Dow Jones Industrial Average (^DJI) gained roughly 0.3% in the lone bright spot among the major indexes. Meanwhile, the S&P 500 (^GSPC) lost roughly 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) fell a steeper 0.3%, as AMD (AMD) and Meta (META) signed a deal that will see Meta buy 6 gigawatts’ worth of AMD GPUs.

Investors are watching a virtual event from Anthropic (ANTH.PVT), which is expected to offer updates on its AI tools and Claude chatbot for companies, as AI fears continue to roll through the market.

Through the afternoon and evening, attention will turn toward President Trump’s State of the Union address, scheduled for 9:00 p.m. ET. The administration’s new 10% global tariff took effect on Tuesday, and according to several reports, the White House is now working on a formal order to raise the rate to 15%, as threatened by Trump.

Waymo is expanding its driverless robotaxi service to new markets in Dallas, Houston, San Antonio, and Orlando, the company said in a statement Tuesday morning. Rides begin the same day.

Shares in Alphabet (GOOG), which owns Waymo, were up slightly in premarket trading.

The expansion brings Waymo to 10 markets and puts the company on track to hit 1 million rides per week by the end of the year, the company said Tuesday. The new cities are “critical to our plans, as we lay groundwork for service in 20+ cities,” Tekedra Mawakana, co-CEO of Waymo, said in the statement.

In the new markets, Waymo said it will will begin by inviting “select riders” who have downloaded the app in those cities, with additional users invited throughout the year.

The move from Waymo also comes after a setback last week in the north, when New York Gov. Kathy Hochul axed a proposal to allow driverless rides in the wider state outside New York City.

Yahoo Finance’s David Hollerith reports:

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Meta (META) will buy up to 6 gigawatts’ worth of AI processing chips, or GPUs, and other AI equipment from Advanced Micro Devices (AMD) under the terms of a multiyear deal announced by the two companies on Tuesday.

AMD shares jumped by 10% in premarket trading on the news, while Meta’s shares fell by roughly 0.4%.

Under the agreement, AMD issued Meta a performance-based warrant for up to 160 million shares of AMD stock, “structured to vest as specific milestones associated with Instinct GPU shipments are achieved,” the companies said. The first tranche of stock is scheduled to vest in time with AMD’s first 1-gigawatt shipment of computing technology to Meta.

Shipments are expected to begin in the second half of 2026, the companies said.

For Meta, the deal with AMD comes right on the heels of another “long-term partnership” signed last week with chipmaking leader Nvidia (NVDA), a direct competitor to AMD. Under the terms of that deal, Meta will increase its use of Nvidia processing equipment throughout its AI workloads.

Meta shares closed Feb. 17, the day the Nvidia deal was announced, roughly flat, while Nvidia closed the day up 1.8%.

Bloomberg reports:

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Whirlpool (WHR) stock fell 8% before the bell on Tuesday after The Wall Street Journal reported that the appliance maker plans to sell 800 million shares to pay off its debt.

Keysight Technologies, Inc. (KEYS) stock jumped 15% before the bell after it beat analysts’ expectations for its first quarter earnings and released an upbeat fiscal second-quarter outlook.

Planet Fitness (PLNT) stock fell 5% during premarket hours on Tuesday following the release of its fourth quarter earnings. The fitness operator beat revenue estimates.

Home Depot (HD) posted mixed fourth quarter results as consumer uncertainty around the housing market lingers.

In the fourth quarter, revenue fell 4% to $38.2 billion, slightly less than nearly $38.3 billion the street forecasted, per Bloomberg consensus data. Adjusted earnings came in better than expected at $2.72 per share, compared with estimates of $2.55.

Overall same-store sales grew 0.4%, compared to the expected 0.4% decline. The results were driven by a higher ticket size, but drop off in consumer transactions.

“For the fourth quarter, our results were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing,” CEO Ted Decker said in the release, “Adjusting for storms, underlying demand was relatively stable throughout the year.”

Home Depot stock rose nearly 3% in premarket trading. Shares are up roughly 10% so far this year. For comparison, the S&P 500 (^GSPC) has been flat.

For the fiscal year, the company posted better than expected results across all key metrics.

Revenue came in at $164.68 billion, more than the $164.59 billion expected, alongside adjusted earnings of $14.69, a tick above the $14.53 expected.

Same-store sales grew 0.3%, more than the 0.2% Wall Street anticipated.

For this fiscal year, the company reiterated guidnce it shared at its investor day back in December. It expects total sales to grow in the range of 2.5% to 4.5%, alongside same-store sales growth of roughly flat to up 2%.

Adjusted earnings for the year are expected to be between flat and up 4.0% from $14.69 posted this fiscal year.

It was a decent quarter, all things considered, for Home Depot (HD).

It offered a reasonable EPS outlook for 2026, given the tepid state of the US housing market.

Here’s what Home Depot CFO Richard McPhail had to say on that, speaking to me this morning.

Bitcoin (BTC-USD) continued to slump, on track to log its biggest monthly fall since a flurry of big corporate collapses shook the crypto world almost four years ago.

The leading cryptocurrency dropped to $62,858 at one point, but recouped some losses to trade above $63,000 on Tuesday morning.

From Bloomberg:

Read more here.

Hims & Hers (HIMS) reported lower profits in the fourth quarter compared with a year ago, sending the stock down more than 5% in premarket trading.

The telehealth and drug platform reported earnings per share of $0.08, beating Wall Street estimates for $0.05 but falling from $0.11 per share a year ago, according to S&P Global Market Intelligence. Revenue of $617.8 million was roughly in line with estimates.

One bright spot in the earnings release was Hims & Hers 2026 revenue forecast, which came in above estimates.

Reuters reports:

Read more here.