Stocks rose Friday as Apple led a broad rally following a strong investor reaction to its quarterly earnings report and the market closes out a whirlwind week highlighted by Nvidia’s record-breaking losses in reaction to China’s DeepSeek cheaper AI model and a flurry of earnings reports.
Stocks proved resilient this week after Monday's scare.
The S&P 500 gained 0.8% by 11:15 a.m. EST,, while the tech-concentrated Nasdaq advanced 1.4%, as both stock index turned green for the week, officially wiping out Monday’s bloodbath.
In-line inflation data Friday morning and Apple’s double earnings beat reported Thursday afternoon helped boost other Big Tech stocks, as shares of Apple and the other members of the “magnificent seven” trillion-dollar companies rose.
Nvidia gained almost 2% as part of the Friday rally, but its market value still tanked by $370 billion this week, after DeepSeek’s innovative cheaper AI cast doubt on continued massive spending on Nvidia’s AI processors powering most generative AI technology.
“This week was one for the history books,” remarked Wedbush analyst Dan Ives in a Friday note to clients.
The positive last day of January also locks in a strong month of gains for U.S. equities, as the blue chip Dow Jones Industrial Average jumped 5.5%, the S&P 4% and the Nasdaq 3.3%.
It’s undeniably bizarre for the broader market to advance when Nvidia, which was the world’s most valuable company heading into this week, fell more than 10% this week. “We expect the greater efficiency from new, lower-cost algorithms to lead to increased economic productivity, which is supportive of the broader equity market,” explained Solita Marcelli, UBS Global Wealth Management’s chief investment officer, Americas, in a Friday note. In short, though the market clearly interprets the increased likelihood that Nvidia, and other AI tech producers like Broadcom and Oracle, take future earnings hits from generative AI getting cheaper, better AI can boost the stock market as a whole as companies across the board benefit from AI-powered productivity gains.
If gains hold, this will be the Dow and S&P’s best January returns since 2019 and the best inauguration month return since January 2013, at the start of former President Barack Obama’s second term. The index now trades just 0.2% below its all-time high of 6,128, set last Friday.
Constellation Energy was the best-performing stock listed on the S&P, returning 37%, while GE Aerospace (up 23%) and Facebook parent Meta (up 20%) were the best-performing “mega-cap” companies worth at least $200 billion, according to FactSet data. Public utility Edison International was the worst-returner, falling 32%, while Nvidia was the biggest mega-cap loser, dropping 6%.
Cruise liner Royal Caribbean and enterprise software firm IBM rose the most, returning 18% and 14%, respectively, while Apple and Meta’s 8% gains led all mega-caps. Nvidia was unsurprisingly the worst-performing company worth at least $150 billion, while delivery service UPS and pharmacy chain Walgreens were the biggest losers overall, falling about 15% apiece.