Tech stocks support a two-day rally in the US stock market, the Federal Reserve reveals inflation concerns, the Dow briefly plunges intraday, and Iran-U.S. tensions help crude oil rebound sharply.

Wednesday’s release of U.S. December new home starts and December core capital goods orders both exceeded expectations, while January industrial production posted its largest month-over-month increase in nearly a year. Strong economic data temporarily overshadowed AI fears, supporting all three major U.S. stock indices to rise early in the session. The Federal Reserve minutes released at midday showed renewed inflation concerns, with some officials supporting the possibility of rate hikes in the guidance, which tempered the rally and caused the Dow to briefly turn lower.

Major U.S. stock indices rose early, but after the Fed minutes were released at midday, gains were pared back, and the Dow turned lower in the short term.

Technology and energy stocks led the U.S. stock rally on Wednesday. The “Magnificent 7” tech giants all gained, with Amazon and Nvidia leading with nearly 3% intraday gains. Nvidia’s stock benefited from Meta’s new agreement to deploy millions of Nvidia chips over the next few years. Amazon’s Q4 holdings were sharply cut by Buffett’s Berkshire Hathaway by 77%, but during the same quarter, Bill Ackman’s Pershing Square increased its stake in Amazon by 65%, helping the stock rebound from a nine-month low after nine consecutive days of decline.

Energy stocks were boosted by a rebound in crude oil. U.S. Vice President Vance said this week’s U.S.-Iran negotiations failed to meet key U.S. demands, and President Trump retains the authority to use military force against Iran. Media reports on Wednesday indicated Trump may soon launch military action against Iran, with a scale exceeding most Americans’ expectations, unlike the surprise raid to seize Venezuela’s Maduro in January. According to CCTV, U.S. officials said the U.S. military should complete its Middle East deployment by mid-March.

WTI crude briefly surged over 5% intraday

The Fed minutes highlighted internal disagreements on rate decisions, with a more cautious stance on rate cuts and a focus on inflation risks. After the minutes, U.S. Treasury prices fell further, the dollar index rose, and non-dollar currencies like the pound and yen, as well as cryptocurrencies like Bitcoin, declined further.

After two days of consecutive declines, investors re-entered the gold market, pushing gold and silver higher. Gold prices rose back above $5,000, but after the Fed minutes, gains narrowed, and gold fell below $5,000, with spot gold unable to recover that level afterward.

Spot gold briefly rose above $5,000 intraday on Wednesday but fell back below after the Fed minutes were released.

The three major U.S. stock indices closed higher for the second consecutive day, but after the Fed minutes, gains narrowed and the Dow briefly turned lower; the semiconductor index outperformed, with Nvidia up 1.6%, and Amazon, which was increased by Bill Ackman’s fund, up nearly 2%; the chip index rose nearly 1%, with Micron, heavily bought by hedge fund Appaloosa, surging over 5%.

U.S. benchmark stock indices:

• S&P 500 up 0.56%, at 6,881.31 points.

• Dow Jones Industrial up 129.47 points, +0.26%, at 49,662.66 points.

• Nasdaq up 0.78%, at 22,753.635 points.

• Russell 2000 up 0.45%, at 2,658.61 points.

• Nasdaq 100 up 0.80%, at 24,898.868 points.

U.S. sector ETFs:

• Energy ETF rose nearly 2%, leading gains; semiconductor ETF up over 1%; utilities ETF down over 1%.

The Magnificent 7 Tech Giants:

• Bloomberg’s Magnificent 7 tech stocks index gained 0.77%.
• Amazon rose 1.8%, Nvidia up over 1.6%, Microsoft nearly 0.7%, Meta up 0.6%, Alphabet (Google’s parent) up nearly 0.4%, Apple up nearly 0.2%.

Chip Stocks:

• Philadelphia Semiconductor Index rose 0.96%, at 8,214.354 points.
• Broadcom gained nearly 0.3%, AMD declined nearly 1.5%, TSMC’s U.S. shares fell over 0.5%.
• Among memory chips, Micron, which was heavily increased by hedge fund Appaloosa in Q4, surged 5.3%; SanDisk up nearly 1.7%; Western Digital up nearly 4.4%; Seagate Technology up nearly 2%.
• Axcelis Technologies (ACLS), with Q1 EPS and revenue guidance below expectations, fell 16.7%.

Chip stocks continued to pare gains after initially hitting daily highs

AI Concept Stocks:

• Palantir (PLTR), upgraded by Mizuho to outperform, rose nearly 1.8%; Oracle (ORCL) up over 1.4%; Dell (DELL) up nearly 0.6%; Supermicro (SMCI) down over 1.3%.

Software Stocks:

• AppLovin (APP) up over 7.4%; Salesforce (CRM) up 1.9%.

Software stocks rebounded overall, but gains narrowed at midday

Chinese Concept Stocks:

• Nasdaq Golden Dragon China Index down 0.04%, at 7,580.87 points.
• WeRide (Wei Yuan Zhixing) down about 4%; Xiaopeng (Xpeng) down nearly 0.9%; Li Auto down 0.4%; NIO down 0.2%; Pinduoduo up over 1%; Baidu up nearly 0.4%; Alibaba up over 0.2%.

Earnings Reports:

• Cadence Design Systems (CDNS), which issued a full-year EPS guidance higher than expected and a record backlog of $7.8 billion at year-end, rose 7.6%.
• Moody’s (MCO), with Q4 EPS and full-year guidance both above expectations, gained 6.5%.
• Caesars Entertainment (CZR), with Q4 earnings beating estimates, rose 13%.
• Palo Alto Networks (PANW), with Q3 guidance below expectations, fell 6.8%.
• DoorDash (DASH), which issued Q1 earnings guidance below expectations but higher platform total order value (GOV) guidance, initially dropped over 7% after hours, then turned positive and rose over 10%.

Highly Volatile Stocks:

• Madison Square Garden Sports (MSGS), after announcing plans to consider spinning off the New York Knicks from the Rangers’ hockey business, rose 16.3%.
• Etsy (ETSY), after announcing it will acquire its secondhand clothing resale platform Depop for about $1.2 billion in cash, surged over 10% after hours.

European stocks continued their rally, hitting new highs for three consecutive days, with UK stocks also reaching new records, and mining stocks up over 4%, tech stocks up nearly 3%.

Pan-European STOXX 600 index rose 1.19%, to 628.69 points, setting a new record close last Wednesday. The index has gained 6.2% this year, reflecting investor confidence that Europe can provide stable economic growth and lower valuations amid rising anxiety over U.S. tech stocks.

Major European country indices all rose on Wednesday, with UK stocks up four days in a row, hitting new closing highs for three consecutive days. French and Spanish markets also rose for three days, while German and Italian markets gained for two days.

STOXX 600 sectors:

• Cyclical sectors led, with basic resources (mining) up 4.2%, technology up 2.8%, oil and gas over 2.2%.

Individual stocks:

• UK defense stock BAE Systems rose about 4%, supported by expectations of steady growth in defense budgets.

U.S. Treasury yields accelerated after the Fed minutes, with the two-year yield no longer approaching its three-year low.

U.S. Treasuries:

• The 10-year U.S. Treasury yield approached 4.09% at the close, rebounding from below 4.02% on Tuesday — the lowest since late November 2025 — and ended around 4.08%, up about 2 basis points intraday, marking its first rise in four trading days after Tuesday’s close.
• The 2-year U.S. Treasury yield approached 3.47% at the close, rebounding from near 3.38% on Tuesday — the lowest since late October 2025 — and ended around 3.46%, up about 3 basis points, after two days of decline.

U.S. Treasury yields rose across the board on Wednesday, with short-term yields leading gains

European bonds generally stabilized:

• By the close, the UK 10-year benchmark yield was about 4.37%, and the German 10-year yield was about 2.74%, both unchanged from Tuesday.

The dollar index hit a more than one-week high after the Fed minutes, with the yen falling 1%, the pound reaching a new three-week low, and Bitcoin dropping below $66,000 to a daily low, down nearly 4%.

Dollar:

• ICE Dollar Index (DXY) fell below 97.20 early in Asia, hitting a daily low, then quickly rebounded. After the Fed minutes at midday, it further rose, briefly surpassing 97.70 at the close, marking its highest since the week of February 9 last year. Intraday, it gained about 0.6%.
• By the close on Wednesday, the dollar index was above 97.70, up nearly 0.6% for the day. Bloomberg’s spot dollar index rose 0.5%, with both the ICE and Bloomberg indices rising for three consecutive days.

Dollar index extended gains after the Fed minutes at midday

Non-dollar currencies:

• The rebound in the yen on Monday faded; USD/JPY hit a daily high of 154.87 after the Fed minutes, up about 1% intraday.
• GBP/USD briefly fell below 1.3500 at midday, hitting a low since January 23, when UK unemployment and wage data reinforced expectations of rate cuts.
• Offshore RMB (CNH) hit a daily high of 6.8826 before European stocks opened, near the high since April 2023. After U.S. economic data, it declined, and after the Fed minutes, the decline widened to a daily low of 6.8942. As of 5:59 a.m. Beijing time on Feb 19, it was at 6.8921, down 69 pips from Tuesday’s New York close, marking a second consecutive decline.

Cryptocurrencies:

• Bitcoin (BTC) rose above $68,400 in early European trading, hitting a daily high, then quickly turned lower. After the Fed minutes, it sharply dropped below $65,900, hitting a daily low, down over $2,000 or nearly 4% from the high. At the close, it was below $66,300, down over 2% in the past 24 hours.

As the dollar hit a new high after the Fed minutes, Bitcoin also hit a daily low

• Ethereum (ETH) rose above $2,030 in early European trading, then fell below $1,930 after the Fed minutes, down over 5% from the high. At the close, it hovered around $1,940, down nearly 3% in 24 hours.

Increased risk of U.S. military action against Iran pushed crude oil higher by over 4%, the largest monthly gain in nearly four months. WTI briefly surged over 5%, and Brent settled above $70 for the first time this month.

Crude Oil:

• Oil prices accelerated from European trading onward. At the U.S. stock market close, WTI crude surged past $65.50, up nearly 5.2% intraday; Brent crude rose to $70.70, up nearly 4.9% from Tuesday’s close.
• At the close, oil prices hit their highest since January 30, and posted their biggest daily percentage gain since October 23, 2025. March WTI futures up 4.59% at $65.19 per barrel; April Brent futures up 4.35% at $70.35 per barrel.

U.S. gasoline and natural gas:

• NYMEX March gasoline futures rose 2.8% to $1.9680 per gallon, marking two days of gains; NYMEX March natural gas futures fell 0.66% to $3.0110 per million British thermal units, two days of declines.

Gold and silver rebounded, with gold rising nearly 3% and silver up 6.5% intraday. After the Fed minutes, gains narrowed, and gold fell below $5,000. Copper rebounded over 2% to a one-week high, while four-day losing streaks in aluminum and other metals reversed, partly due to news of possible U.S. tariffs removal.

Gold:

• Gold re-approached the $5,000 level early in the U.S. session. At the intraday high, COMEX April gold rose to $5,031.9, up nearly 2.6%; spot gold rose to $5,010.9, up over 2.7%.
• After the Fed minutes, gold’s gains narrowed; futures and spot gold retreated below $5,000 and $4,980 respectively, with futures up less than 2% and spot gold up just over 2%.
• By the close, COMEX April gold settled up 2.1% at $5,009.5 per ounce; spot gold closed at $4,985.45, up 2.2% for the day.

Spot gold briefly rose above $5,000 intraday but fell back after the Fed minutes

Silver:

• COMEX March silver futures rose 5.5% to $77.598 per ounce, hitting a daily high of $78.32 during Wednesday’s U.S. session, up nearly 6.5%; after the Fed minutes, the gain narrowed to about 4%.
• Spot silver also broke above $78.30 during midday, up over 6.5%, but after the Fed minutes, the gain narrowed to around 4.1%.

London base metals:

• Lead and nickel led gains, with London nickel and copper up over 2%. Nickel recovered from a two-week low, while copper rebounded to a one-week high. Aluminum, zinc, and lead reversed four days of declines. Tin, which had rebounded on Tuesday, pulled back slightly.

• LME copper rose about 2.3% to $12,912 per ton, reaching a high since February 11. LME aluminum up nearly 1.8% at $3,089 per ton. LME nickel up nearly 2.5% at $17,275 per ton. LME zinc up about 2% at $3,354 per ton.