On the 18th (local time), the New York stock market closed higher as worries about artificial intelligence (AI) corporations and key economic indicators eased. The Federal Reserve (Fed), the U.S. Central Bank, struck a hawkish (preference for currency tightening) tone that it could raise rates further to rein in inflation, but investor sentiment toward tech stocks did not falter.
On the New York Stock Exchange (NYSE), the blue chip–heavy Dow Jones Industrial Average rose 129.47 points, or 0.26%, to finish at 49,662.66. The large-cap–focused Standard & Poor's (S&P) 500 rose 0.56% to 6,881.31. The tech-heavy Nasdaq added 0.78% to close at 22,753.63.
Early in the session, the market was visibly on edge over the minutes from the Federal Open Market Committee (FOMC) meeting in January. The FOMC is the Fed's key body for setting U.S. interest-rate policy. According to the released minutes, several Fed Commissioners said rates should be raised again if inflation does not fall to the 2% target. That went beyond expectations of a delayed rate cut and left the door open to additional tightening.
U.S. Government Bonds yields rose across the board as a result. In the bond market, the 10-year Treasury yield climbed 0.02 percentage point to 4.08%, and the 2-year yield also rose to 3.46%. Typically, when rates rise, financing expense for corporations increases, which is a negative for stocks.
But the market focused more on the fundamentals of tech stocks than on rate worries. In particular, semiconductor and software names, which had recently pulled back amid an AI bubble narrative, drew strong dip-buying. The Philadelphia Semiconductor Index, which aggregates major semiconductor corporations including Nvidia, rose 1%. An exchange-traded fund (ETF) that invests in software corporations also gained 1.3%, helping lift the indexes.
The Magnificent 7 (the seven large-cap tech leaders in the U.S. market) return index compiled by Bloomberg also rose 0.7%. A broad rebound in mega-cap tech turned overall market sentiment around. Among S&P 500 constituents, shares of about 320 corporations advanced, showing the market's broad-based upswing.
Experts analyzed that investors judged the market bottom had already been confirmed. Rita Nazareth, a Bloomberg strategist, said tech stocks regained momentum as worries about the disruptive changes AI technology could bring began to ease. She noted investors have started to give more weight to the benefits of corporations' growth than to rate uncertainty.
The fact that economic indicators remain solid also added support to stocks. As the U.S. economy showed a Goldilocks pattern—neither too hot nor too cold—holding up despite a high-rate environment, investors opted to buy risk assets such as equities. Expectations are also building that economic policies pursued under President Trump's administration will have a positive effect on corporations' profits.
By sector, energy and materials moved prominently. West Texas Intermediate (WTI) crude jumped 4.9% from the previous day to $65.39 per barrel, driven by growing supply concerns. International gold prices also surged 2.2% to $4,985.63 per ounce on overlapping demand for safe-haven assets and inflation hedging (risk diversification), putting the $5,000 threshold within sight.
The cryptocurrency market, meanwhile, moved opposite to stocks. Bitcoin traded at $66,103.01, down 2.3% from 24 hours earlier, and Ethereum fell more than 3%. As funds flowed into equities, buying interest in cryptocurrencies relatively weakened.
The small- and mid-cap–heavy Russell 2000 rose 0.5%, joining the large-cap–led rally. In the foreign exchange market, dollar strength continued. The dollar index, which measures the dollar against six major currencies, rose 0.5%. The euro and British pound each fell more than 0.5% against the dollar, and the Japanese yen weakened to 154.80 per dollar.
Going forward, stocks are expected to take direction from additional remarks by Fed Commissioners and employment data. With rate-hike possibilities mentioned, the pressure felt by the market remains. However, if tech earnings hold up, the prevailing view is that the current uptrend could continue.