Tech and AI Stocks Drive Wall Street Rally with Nasdaq and S&P 500 Gaining Ground

The stock market experienced a mixed performance with technology and semiconductor stocks leading the charge.

The Nasdaq jumped 243.30 points or 1.2% to 19,864.90 and the S&P 500 climbed 32.91 points or 0.6% to 5,975.38. The narrower Dow, on the other hand, edged down 25.57 points or 0.1% to 42,706.56.

The early rally on Wall Street partly reflected continued strength among tech stocks after contract electronics giant Foxconn reported record fourth quarter revenue amid strong AI server demand. Foxconn is an assembly partner with AI darling and market leader Nvidia (NVDA), which shot up by 3.4%. Chipmaker Micron (MU) also skyrocketed by 10.5%.

Airline stocks saw substantial strength with a 3.7% spike by the NYSE Arca Airline Index. American Airlines (AAL) gained well after TD Cowen upgraded its rating on the airline's stock to Buy from Hold. Computer hardware and semiconductor stocks saw significant strength, with the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index surging by 3.6% and 2.8%, respectively. Steel and networking stocks was notably strong while commercial real estate and utilities stocks were considerably weak.

Asia-Pacific stocks turned in a mixed performance while Japan's Nikkei 225 Index slumped by 1.5%, South Korea's Kospi shot up by 1.9%. European stocks moved mostly higher on the day. The French CAC 40 Index surged by 2.2% and the German DAX Index jumped by 1.6%, while the U.K.'s FTSE 100 Index rose by 0.3%.

In the bond market, treasuries climbed well off their worst levels but closed modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.2 bps to 4.61% after hitting an eight-month intraday high of 4.64%.

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