Dow closes above 50,000, Nvidia soars as traders focus on AI spending
Fri February 6, 2026 6:33 AM
Well, isn’t this cute? After three days of severe panic selling over anxiety over the future profitability of AI, suddenly it’s a market favorite again with all three indexes shooting way straight up right out the gate and staying there all day, the Dow with a whopping 4-digit lead and even the S&P with a 3-digit, the Nasdaq of course with a big 3-digits. As today’s expert put it, “When there’s this kind of a selloff, I think there’s a floor where there’s going to be a certain set of investors that steps in and starts buying these names.” Is this just bargain hunting that sent the Dow to a new record, breaking the formidable 50,000 and the S&P within a stone’s throw of another record? What makes no sense at all is the conditions that triggered the massive selloff are still very much in evidence.
Companies like Amazon and Alphabet continue to be punished for their continuing huge AI expenditures and yet it’s those very expenditures that caused today’s huge rally in Nvidia and the overall chip sector, the company up 7.8%, the sector index 5.7%. The Dow continues to outperform tech as the migration continues from what investors see as overvalued megacaps to undervalued smaller companies that are expected to pop. Everyone’s more relaxed tonight as reflected in the VIX that dropped four big points. But the overall sentiment remains, “This trade has been volatile, and there have been selloffs at times, but there’s enough evidence that there’s real demand for AI products and a necessity of a lot of spending to get there.” And yet the companies that are doing the spending are being sold off. Go figure. The huge selloffs have elevated daily volume to an average of 20.5 billion, with today’s volume being right in line at 20.1 billion.
DJ: 48,908.72 -592.58 NAS: 22,540.59
-363.99 S&P: 6,798.40
-84.32 2/5
DJ: 50,115.67 +1,206.95 NAS: 23,031.21
+490.63 S&P: 6,932.30 +133.90 2/6
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