US stocks edged higher on Wednesday as investors cautiously stepped back into equities, encouraged by signs that last week’s AI-driven panic may be stabilizing. The S&P 500 gained ground alongside the Nasdaq, while the Dow Jones Industrial Average rose more modestly, reflecting renewed appetite for risk after several weeks of volatility.
The rebound comes as traders position ahead of the release of minutes from the Federal Reserve’s January policy meeting. Markets are looking for clearer signals on rate-cut timing after recent inflation data cooled and economic growth indicators showed resilience, helping sentiment recover from fears that AI disruption could spark broader corporate weakness.
Market Movers:
- Mister Car Wash (MCW) +16%: Shares surged after the company agreed to be taken private by Leonard Green & Partners in a deal valuing the business at roughly $3.1 billion. The buyout offer of $7.00 per share represents a meaningful premium and is expected to close in the first half of 2026, pending shareholder approval.
- Garmin (GRMN) +16%: The stock soared following a strong fourth-quarter earnings beat and upbeat full-year guidance. Management projected 2026 revenue of $7.9 billion and pro-forma EPS of $9.35, both ahead of expectations, underscoring steady demand across its aviation, fitness, and marine segments.
- Madison Square Garden Sports (MSGS) +15%: Shares climbed after the company announced it is exploring a potential spin-off separating the New York Knicks and New York Rangers into independently traded entities. Investors responded positively to the prospect of unlocking franchise-specific value and providing greater strategic flexibility.
- Amazon (AMZN) +2%: The stock advanced after filings revealed Bill Ackman’s Pershing Square increased its stake by 65% in the fourth quarter. The move signals growing institutional conviction in Amazon’s long-term positioning across e-commerce, cloud computing, and AI infrastructure.
- Nvidia (NVDA) +2%: Shares rose following news of a broad multi-year AI infrastructure partnership with Meta Platforms. The agreement includes expanded deployment of Nvidia’s next-generation chips and networking systems, reinforcing the company’s central role in the AI ecosystem.
- Similarweb (SMWB) -28%: The stock plunged after revenue missed expectations and the company issued weaker-than-expected forward guidance. Slower growth projections for 2026 raised concerns about demand visibility in a competitive digital analytics environment.
- HF Sinclair (DINO) -15%: Shares fell despite a quarterly earnings beat, as investors focused on leadership uncertainty. The CEO’s voluntary leave of absence and delayed filing of the company’s annual report added caution around governance and disclosure processes.
- Palo Alto Networks (PANW) -9%: The cybersecurity firm posted strong revenue growth but disappointed on earnings guidance. While demand remains solid, margin pressure weighed on investor sentiment despite raised full-year revenue projections.
AI Volatility Still Lingers Beneath the Surface
Although Wednesday’s gains suggest a cooling of immediate AI panic, the broader debate around AIs economic impact remains unresolved. Software, logistics, and financial-services names have experienced sharp swings in recent weeks as investors attempt to distinguish between real disruption risk and speculative fear.
Executives across industries continue to emphasize long-term productivity gains from AI adoption, but Wall Street remains sensitive to headlines suggesting automation could compress margins or displace traditional business models. The recent volatility reflects how quickly sentiment can shift when expectations are elevated.
Commodities and Geopolitics Add Crosscurrents
Outside equities, commodities remain active. Gold rebounded above $5,000 per ounce as tensions between the US and Iran escalated, reinforcing safe-haven demand. Meanwhile, oil prices fluctuated amid evolving diplomatic developments and concerns about supply routes in the Middle East. Energy and industrial data also provided a mixed backdrop. January industrial production surprised to the upside, suggesting manufacturing momentum remains intact even as consumer sentiment shows signs of strain. These crosscurrents continue to complicate the Federal Reserve’s path forward.
Fed Minutes in Focus
All eyes now turn to the release of minutes from the Federal Reserve’s January meeting. Investors are searching for confirmation that policymakers remain on track for at least two rate cuts this year, particularly after inflation cooled in the latest CPI report. Markets will also be parsing commentary for any discussion around AI’s labor-market implications or financial stability risks. With volatility still elevated and earnings season entering its final stretch, clarity from the Fed could provide either reassurance — or fresh fuel for swings.
Looking Ahead
The remainder of the week will test whether Wednesday’s rebound has staying power. Corporate earnings continue to roll in, and Friday’s Personal Consumption Expenditures report — the Fed’s preferred inflation gauge — could reshape rate-cut expectations yet again. If inflation continues to moderate and AI anxiety subsides, equities may attempt to rebuild momentum after a choppy start to February. But with geopolitical tensions simmering and positioning still fragile, markets remain vulnerable to sharp, sentiment-driven moves in either direction.
