Market snapshot
Stocks rallied on Friday as technology names staged a recovery after several sessions of sharp declines, and Bitcoin regained ground after a severe selloff that at one stage had wiped out more than half of its value. The Dow Jones Industrial Average climbed 1,206.95 points, or 2.47%, to finish at 50,115.67, marking the first close above the 50,000 threshold.
The S&P 500 rose 1.97% to 6,932.30 and the Nasdaq Composite gained 2.18% to 23,031.21. Friday’s move returned the S&P 500 to positive territory for 2026.
Despite the strong finish, weekly returns painted a mixed picture: the S&P 500 slipped 0.1% for the week and the Nasdaq declined 1.8%, while the Dow outperformed with a 2.5% advance. Market participants noted rotation into economically sensitive stocks even as technology continued to exert pressure on the broader market.
Economic calendar and data focus
Investor attention now shifts to several economic reports that were delayed following the recent three-day government shutdown. The employment release and the consumer price index, postponed because of the shutdown, are scheduled for Wednesday and Friday, respectively.
Markets are parsing signs of loosening in the labor market. The Federal Reserve flagged stabilization in jobs when it left interest rates unchanged last month, but a survey released Thursday indicated a jump in January layoff announcements.
Economists at Deutsche Bank "expect headline and private payrolls to rise by 75k (consensus at +69k and +75k respectively), a modest improvement relative to recent trend rates." If that scenario materializes, Deutsche Bank anticipates the unemployment rate would remain at 4.4%.
Inflation readings remain a key input for policy expectations. The Federal Reserve has described price pressures as "somewhat elevated," and January consumer price data due Friday are expected to provide fresh signals about the persistence of inflation.
Q4 earnings enter final stretch
The fourth-quarter reporting season is moving toward its final stage, bringing another packed slate of corporate results. While many large technology firms have already reported, several prominent software companies have yet to publish results, including AppLovin and Datadog.
The software cohort has experienced significant recent weakness. The S&P 500 software and services index fell 15% in just over a week amid investor concerns about AI-related disruption and disappointing reports from companies such as Microsoft.
Investors will also receive updates from major consumer and technology-related companies in the coming days, among them Coca-Cola, Cisco Systems, and McDonald’s.
What strategists are saying
Institutional strategists offered a range of tactical perspectives heading into the data- and earnings-heavy week.
Citi said that, "On a tactical basis, global equities could thus see some consolidation. While volatility could become a feature this year, we remain constructive to year-end and see broadening equity performance (Overweight EM/Japan). Global IT nonetheless looks increasingly attractive in our allocation models, though we are more cautious (Neutral) in Europe."
Oppenheimer noted that market action "could continue near term to dance from theme to theme through most of this week with the direction of the markets prone to shifts from 'risk on' to 'risk off' resulting as in recent weeks in some roundtrip action through the week depending on the data du jour. The good news persists in that the underlying economic and corporate fundamentals remain overall positive with data along with earnings growth suggesting to us that there’s enough resilience for stocks to withstand and navigate some choppiness near term."
RBC Capital Markets observed that "It’s possible that this latest bout of weakness has played out for now. If there’s more pain to come, we think it’s reasonable to anticipate a tier 1 garden-variety pullback in the 5-10% range. In the post-GFC era, serious drawdowns that have exceeded the 5-10% range have tended to be growth scares, when fears of a systemic issue or recession surface - similar to the environment seen a year ago when the S&P 500 fell 18.9% around the liberation day tariff announcement. While we take concerns about the AI trade and private markets and other matters seriously, we think it’s premature to assume that’s the kind of risk we face today."
Goldman Sachs said, "We expect 120 IPOs totaling $160 billion will come to market in 2026. Large historical increases in IPO supply have typically preceded below-average equity market returns, but we think much of this is correlation rather than causation."
Model-driven ideas and stock-specific note
Separately, an AI-driven screening tool referenced MSFT specifically in the context of its evaluation process. The tool evaluates MSFT alongside thousands of other companies each month using more than 100 financial metrics. It highlights historical winners, such as Super Micro Computer (+185%) and AppLovin (+157%), to illustrate past outcomes from its selection process. The model is presented as data-driven and impartial, designed to surface opportunities based on fundamentals, momentum, and valuation.
Bottom line
Friday’s broad-based rally alleviated some recent selling pressure and pushed key indexes higher, notably lifting the Dow past the 50,000 mark. Nonetheless, volatility may persist as the market digests delayed employment and inflation data and a final series of quarterly reports that include software names and major consumer companies. Strategic positioning will likely hinge on incoming data and earnings results in the days ahead.
Report prepared analyzing market moves, economic releases, earnings flow, and strategist commentary ahead of the coming week.