The Dow Jones Industrial Average blew past the historic 50,000 mark on Friday and the S&P/TSX Composite Index rose the most in nearly four months as investors took advantage of sectors that were beaten down after a volatile week.
Shares of Nvidia gained 7.8% and Caterpillar rose 7%. Both are heavyweights in the Dow and helped the index to break to all-time highs.
The blue-chip index is up 4.2% for the year so far and has outperformed the other major indexes on Wall Street. Caterpillar is up more than 26%, while Nvidia is slightly lower so far in 2026.
Bitcoin, meanwhile, steadied Friday following a weekslong plunge that had sent it more than halfway below its record price set in October. It rose just over 10%, erasing a good chunk of Thursday’s 15% fall.
While Nvidia and other chipmakers soared, Amazon tumbled after the cloud heavyweight forecast a sharp increase in spending on AI infrastructure. Amazon dropped 5.6% after saying it planned a more than 50% jump in capital expenditures this year, intensifying a race to dominate AI technology and following a similar announcement from Alphabet on Wednesday.
Chip stocks rallied on expectations they would benefit from increased spending on AI data centers by Amazon and Alphabet. Advanced Micro Devices surged 8.3% and Broadcom climbed 7.1%, while the PHLX semiconductor index closed up 5.7%.
Friday’s rallies in the S&P 500 and the Nasdaq followed three straight days of losses marked by worries about AI. Several software companies were hit this week by concerns that AI could create more competition and hurt their margins, while investors have also fretted about elevated valuations following years of steep gains in AI-related stocks.
“This trade has been volatile, and there have been selloffs at times, but I think there’s enough evidence that there’s real demand for AI products, real promise with what they can do, and a necessity of a lot of spending to get there,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “So when there’s this kind of a selloff, I think there’s a floor where there’s going to be a certain set of investors that steps in and starts buying these names.”
The S&P 500 Software & Services index added 2.4% and ended seven straight sessions of losses, although its weekly drop of around 8% was its poorest weekly performance since March 2020.
The Dow outperformed the S&P 500 and Nasdaq this week, reflecting a recent diversification by investors away from tech stocks that have led Wall Street in recent years and toward companies that have missed out on those big gains. Reflecting the same trend, the Russell 2000 index of small-cap companies also rallied this week.
The S&P 500 climbed 1.97% to end the session Friday at 6,932.30 points. The Nasdaq gained 2.18% to 23,031.21 points, while the Dow rose 2.47% to 50,115.67 points, its highest close ever.
The S&P/TSX Composite Index ended up 476.38 points, or 1.5%, at 32,470.98, posting its biggest advance since October 14 and clawing back most of the previous day’s sharp decline. For the week, the index was up 1.7%.
“We’re just getting into earnings season for the TSX. Similar to what we’re seeing in the United States, earnings are coming in quite strong and that should be the expectation that we get pretty decent earnings,“ said Philip Petursson, chief investment strategist at IG Wealth Management.
“The positive is that the rout we’ve seen in the metals sector it looks like it’s perhaps behind us with the strength we’ve seen in the gold names today and other precious metals,” Petursson said.
The materials group jumped 3.9%. Gold rallied 4.8%, helped by bargain hunting, a slightly weaker U.S. dollar and lingering concerns over U.S.-Iran talks in Oman, while silver recovered from a 1-1/2-month low.
The price of oil also rose, settling 0.4% higher at US$63.55 a barrel, which helped lift energy by 1.9%.
Heavily weighted financials added 0.9% and industrials ended 1.5% higher.
Nine of 10 major sectors posted gains. The exception was the defensive utilities sector, which ended 0.2% lower.
Domestic employment data was mixed. It showed that the economy unexpectedly shed 24,800 jobs in January but the unemployment rate dipped to a 16-month low of 6.5% as fewer people looked for work.
On Wall Street, nine of the 11 S&P 500 sector indexes rose, led by information technology, up 4.1%, followed by a 2.84% gain in industrials.
The S&P 500 energy sector index hit a record high, along with industrials and consumer staples.
For the week, the Dow added 2.5%, the S&P 500 lost 0.1% and the Nasdaq slid 1.9%.
The S&P 500 was less than 1% below its record-high close set last week, and the Nasdaq was down 4% from its record-high close last October.
The CBOE volatility index, Wall Street’s fear gauge, dropped for the first time in three days.
Over half of S&P 500 companies have reported their quarterly results, and roughly 80% topped analysts’ expectations, according to LSEG data, well above the typical beat rate of about 67%.
Advancing issues outnumbered falling ones within the S&P 500 by a four-to-one ratio.
The S&P 500 posted 88 new highs and 13 new lows; the Nasdaq recorded 214 new highs and 181 new lows.
Volume on U.S. exchanges was steady, with 20.1 billion shares traded, compared with an average of 20.5 billion shares over the previous 20 sessions.
Reuters, Globe staff