U.S. stocks edged up on Monday as investors attempted to build on last week’s late rebound following volatility tied to AI fears and shifting economic expectations. The S&P 500 gained roughly half a percent while the Nasdaq Composite rose close to 1%, signaling renewed appetite for technology shares after several bruising sessions
The Dow Jones Industrial Average hovered near the flatline but remained above the historic 50,000 threshold reached at the end of last week. Even with the stabilization, markets remain sensitive to incoming economic data, earnings results, and evolving sentiment around AI spending and software-sector disruption.
Market Movers:
- Valaris (VAL) +22%: Shares surged after an all-stock acquisition agreement with Transocean that will create a larger offshore drilling leader with significant cost-synergy potential. Investors welcomed the scale benefits and clearer long-term positioning in energy services.
- Terawulf (WULF) +10% and Cipher Mining (CIFR) +4%: Bitcoin-linked miners climbed after a bullish analyst initiation highlighted the growing value of power infrastructure as AI and data-center demand accelerate. The call reinforced the idea that some crypto miners could evolve into broader energy-and-compute plays.
- Kroger (KR) +6%: The grocer advanced on news of a new chief executive with deep big-box retail experience, fueling optimism about competitive positioning after the blocked Albertsons merger. Leadership clarity is seen as key to navigating pricing pressure and shifting consumer habits.
- SoFi Technologies (SOFI) +2%: Shares edged higher following an analyst upgrade that framed recent weakness as technical rather than fundamental. Continued product expansion and improving execution underpin the constructive outlook.
- Kyndryl (KD) -53%: The stock collapsed after delayed regulatory filings, leadership departures, and disclosure of potential internal-control weaknesses raised serious governance concerns. Investors reacted sharply to uncertainty surrounding financial reporting and oversight.
- Hims & Hers Health (HIMS) -24%: Shares plunged after the company halted sales of a compounded weight-loss drug following regulatory pressure and industry scrutiny. The decision heightened worries about growth sustainability in its GLP-1-related offerings.
- Cleveland-Cliffs (CLF) -23%: The steelmaker slid as weak automotive demand and a revenue miss overshadowed a narrower-than-expected quarterly loss. Investors remain cautious despite management’s expectation for improving conditions in 2026.
- Monday.com (MNDY) -20%: Shares dropped after soft forward guidance eclipsed an earnings beat, reinforcing broader anxiety about software-sector growth in an AI-driven landscape. Currency headwinds and moderating margins added to the cautious tone.
AI Disruption Debate Continues to Shape Sentiment
Concerns about how AI could reshape traditional software economics remain central to market direction. Some strategists warn that historical disruption cycles show stock prices often decline for years until earnings visibility stabilizes, suggesting volatility in the sector may persist even after strong quarterly results. At the same time, selective rebounds in chipmakers and infrastructure-linked tech names indicate investors are differentiating between AI winners and potential losers, rather than abandoning the theme altogether.
Economic Data Looms Over the Rebound
Markets are now turning toward a critical stretch of macroeconomic releases. The delayed January jobs report and upcoming inflation data will help determine whether recent signs of labor-market cooling represent a mild slowdown or the start of broader economic weakness. Until that clarity arrives, trading is likely to remain reactive, with equities moving sharply on each new data point or policy signal.
Earnings Calendar Keeps Pressure on Stocks
Corporate results continue to arrive across sectors, from semiconductors to consumer staples and networking giants. With valuations still elevated in parts of the market, investors are demanding not just earnings beats but convincing forward outlooks, particularly around AI spending efficiency and demand durability. This higher bar for optimism has been a defining feature of early-2026 trading.
Looking Ahead
Monday’s gains suggest Wall Street is attempting to stabilize after a volatile start to the year, but confidence remains fragile. The next decisive move will likely depend on labor-market data, inflation trends, and whether AI-driven investment begins translating into clearer profit growth. Until then, markets appear set for continued swings — balancing cautious macro signals against enduring enthusiasm for the technologies shaping the next economic cycle.
