Market Recap - Friday February 6, 2026
Markets Roar Back as Small Caps and AI Stocks Lead the Rebound
Stocks surged today, sharply rebounding from yesterday’s selloff and ending the week on a much stronger note. The Dow jumped 2.5% and hit a fresh all-time high, the S&P 500 rose nearly 2%, the Nasdaq gained over 2%, and small-cap stocks led the way with a 3.6% rally. While tech has struggled this week, the broader market showed real strength, with the equal-weight S&P also setting a new record — another sign that gains are spreading beyond a handful of mega-cap names.
Risk appetite returned across many areas that had been under pressure. AI-related stocks, semiconductors, small caps, retail-investor favorites, and heavily shorted stocks all rallied strongly. Software stocks bounced after a rough stretch, helped by growing chatter that the sector had become deeply oversold. Banks, energy, industrials, airlines, and materials also saw solid gains. Big tech was mixed, however — Amazon lagged on concerns around massive AI spending, while Nvidia stood out on the upside. Defensive pockets like insurance, payments, and telecom trailed the broader rally.
Markets also took some comfort from the economic backdrop. Consumer sentiment came in better than expected, with inflation expectations falling to their lowest level in a year — helping ease some of this week’s worries around jobs and growth. Bond yields edged higher after Thursday’s sharp drop, the dollar weakened slightly, and commodities rebounded. Gold climbed nearly 2%, oil stabilized, and Bitcoin jumped back toward $70,000 after flirting with $60,000 a day earlier.
Earnings continued to drive big single-stock moves. Bill Holdings soared after strong results and upbeat guidance tied to growth in digital payments and “agentic finance.” Roblox surged on a strong bookings outlook, while Under Armour surprised investors with a return to profitability. Novo Nordisk rebounded after regulators pushed back against copycat weight-loss drugs. On the downside, Molina Healthcare plunged after a major earnings miss, and a handful of healthcare, logistics, and consumer names slid on weaker guidance or company-specific issues.
Here’s Our Take
Today’s rally was a reminder of how quickly sentiment can flip in this market. After several days of fear around jobs, AI disruption, and heavy tech spending, investors stepped back in — especially into oversold areas and parts of the market tied to economic growth. The fact that small caps and the equal-weight S&P led the rebound is encouraging and supports the idea that market leadership is broadening.
That said, volatility isn’t going away. Big questions remain around the labor market, inflation, and how much AI investment will ultimately pay off. For now, the trend favors diversification and balance: exposure beyond mega-cap tech, a mix of growth and cyclicals, and patience as markets digest a fast-changing economic and technological landscape.
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