Tonight! Prices are soaring, hitting new highs! The market is experiencing a surge, and everyone is excited about the unprecedented growth. Stay tuned for more updates!

【Introduction】Counterattack, Surge, Dow Hits New Highs

Brothers and sisters, I spent the whole day delivering milk tea outside today, and finally I’m back to write this article for everyone.

Tonight, market sentiment experienced a major reversal, with a full-scale rally. Let’s explore the reasons behind it.

On the evening of February 6th, the three major U.S. stock indices surged dramatically, with the Dow soaring 900 points to a new all-time high, and the Nasdaq rising over 1.3%.

Chip stocks led the rally, with Nvidia jumping over 6%, and the Philadelphia Semiconductor Index surging more than 4%.

Gold and silver also soared, with spot silver prices jumping 8%.

Bitcoin temporarily plummeted 16% overnight, briefly falling below $61,000. But tonight, it recovered some ground, rising 9% and re-approaching $68,000.

Meanwhile, tech giant Amazon plunged over 8%. The reason is the company’s commitment to invest $2 trillion in AI, but investors remain cautious about large-scale spending plans in artificial intelligence-related fields.

The four American tech giants—Alphabet, Amazon, Meta, and Microsoft—are expected to have a combined capital expenditure of about $650 billion by 2026. This is an astonishing flood of cash mainly directed toward new data centers and various equipment within them. This wave of spending is almost unprecedented in this century.

So why has the market suddenly started to surge again?

Analysts point out that Amazon’s $2 trillion capital expenditure may benefit multiple companies, including Mavenir Technologies, which is one of the potential beneficiaries, as it is producing Trainium processors for Amazon.

Other potential beneficiaries include Nvidia and U.S.-based AMD, as Amazon has established deep partnerships with these two semiconductor giants and will use their chip products to meet computing power demands in cloud computing and AI fields.

Some analysts also say, “This scale of capital expenditure is expected to put pressure on free cash flow, but some believe Amazon has a good track record of successfully navigating economic downturns and ultimately winning.”

Anwiti Bahuguna from Northern Trust Asset Management believes that the recent plunge in tech stocks actually provides a reason for the overall market to “buy on dips,” because the U.S. economy still looks solid.

She said, “This is like squeezing some of the bubbles out of the market. We are also seeing clearer use cases for AI. From a macro perspective, now is not the time for panic.”

Venu Krishna, a stock strategist at Barclays, stated, “Reevaluating the sentiment around AI does not fundamentally change our positive outlook on the core fundamentals of large tech companies at the center of the AI capital expenditure cycle. Their valuations remain attractive, and we still believe that even if the market temporarily pulls back from the AI narrative, their earnings profiles will remain resilient.”

Additionally, the closely watched Consumer Confidence Index has slightly increased this month after experiencing a downturn at the end of last year. The University of Michigan Sentiment Index has risen for the third consecutive month, with a preliminary reading of 57.3 in early February.