Stocks Recover as Chipmakers Rebound

Market Overview - Overseas stock markets are lower, with the Euro Stoxx 50 down by -0.40%, China's Shanghai Composite down -1.26%, and Japan's Nikkei Stock 225 down -1.21% [1] - The markets are pricing in a 10% chance for a -25 basis point rate cut at the next policy meeting on March 17-18 [1] Earnings Reports - Q4 earnings season shows positive results, with 76% of the 358 S&P 500 companies that have reported beating expectations [2] - S&P earnings growth is expected to increase by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [2] - Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to rise by +4.6% [2] Inflation Data - US January CPI rose +2.4% year-over-year, weaker than the expected +2.5% and the smallest increase in 7 months [3] - January core CPI rose +2.5% year-over-year, matching expectations and marking the smallest increase in 4.75 years [3] Stock Movements - Stocks initially moved lower, with the S&P 500 and Nasdaq 100 hitting 1-week lows due to concerns over AI disrupting various sectors [4] - Stock indexes recovered from early losses, with a rebound in chip makers leading the market, particularly Applied Materials which jumped +10% after reporting stronger-than-expected Q1 adjusted EPS [5][9] - Cryptocurrency-exposed stocks are climbing, with Bitcoin up more than +4% and Coinbase Global up more than +14% [10] Sector Performance - Metal companies are under pressure due to reports of the Trump administration working to narrow tariffs on steel and aluminum products, with Century Aluminum down more than -6% [11] - Rivian Automotive is up more than +19% after reporting Q4 revenue of $1.29 billion, exceeding consensus expectations [12] - Arista Networks is up more than +5% after reporting Q4 revenue of $2.49 billion, better than consensus [13] - Airbnb is up more than +4% after reporting Q4 gross booking value of $20.4 billion, exceeding expectations [14] Company Forecasts - DraftKings is down more than -12% after forecasting full-year revenue of $6.5 billion to $6.9 billion, below consensus [15] - Expedia Group is down more than -5% despite better-than-expected Q4 earnings, as AI poses a long-term risk for the online travel industry [16]