US shares rose for a third session. The DJIA added about 300 points (0.65%), the S&P 500 rose 0.6%, and the Nasdaq gained about 0.5%.
Markets awaited the Fed’s January minutes due at 2:00 PM ET. The Fed held rates at 3.50% to 3.75%, with a roughly 90% chance of no change in March and the first cut not expected before June.
Ai Trade And Fed Focus
Nvidia rose over 2% after Meta expanded an AI chip deal. Meta plans to deploy millions of Nvidia chips in US data centres, including Grace CPUs and Vera Rubin GPU systems, described as worth tens of billions.
AMD fell nearly 4%. Amazon rose nearly 2% after a 65% fourth-quarter stake increase by Pershing Square, while Goldman Sachs gained nearly 3%.
Palo Alto Networks fell about 10% despite Q2 adjusted EPS of $1.03 on $2.59 billion revenue versus $0.94 and $2.58 billion expected. Its Q3 EPS outlook was $0.78 to $0.80 versus a $0.92 consensus, with shares down 11% year to date.
Costs were linked to a $25 billion CyberArk acquisition and a $3 billion Chronosphere deal. Applied Digital fell nearly 8% after Nvidia exited a $177 million stake.
Earnings And Options Volatility
Garmin jumped after adjusted EPS of $2.79 on $2.12 billion revenue versus $2.39 and $2.01 billion expected. It guided 2026 EPS of $9.35 on $7.9 billion revenue versus $8.51 and $7.4 billion.
Wingstop rose more than 13% after adjusted EPS of $1.00 versus $0.84 expected. Q4 domestic same-store sales fell 5.8%, and 2026 guidance was flat to low-single-digit growth.
Gold rose above $5,000 per ounce, near a two-week high. China’s central bank bought gold for a 15th month in January, after a late-January crash tied to Kevin Warsh’s nomination.
Oil rose more than 2% to nearly $64 per barrel on Russia-Ukraine tensions and Iran nuclear-talk reports. December housing starts were 1.4 million annualised, released late after a government shutdown.
Given the market’s rebound from last week’s AI-driven selloff, we should watch for continued volatility in the technology sector. The upcoming Fed minutes are critical, as any hint of delaying rate cuts beyond June could quickly reverse the current dip-buying trend. With the latest January 2026 jobs report showing surprising strength, much like the robust reports we saw throughout 2024, the Fed has little pressure to cut rates immediately.
We see the AI trade becoming more selective, with Nvidia cementing its dominance through the new Meta partnership. A potential strategy is a pairs trade, using call options to favor Nvidia over AMD, especially given the nearly 4% slide in AMD shares today. This divergence reinforces the winner-take-all dynamic we have observed in the AI hardware space for the past two years.
Individual stock earnings are creating significant moves, presenting clear opportunities in single-name options. The 10% drop in Palo Alto Networks on weak guidance suggests puts could be valuable, while the soaring implied volatility in names like Garmin and Wingstop post-earnings makes strategies like selling puts attractive for those betting the new highs will hold. We should anticipate similar volatility in other tech and consumer names reporting in the coming weeks.
We are also watching commodities for signs of continued strength, with gold futures climbing above a record $5,000 per ounce. Given the sustained central bank buying and expectations of a Fed pivot, call options on gold ETFs look appealing, reminiscent of the major rallies seen during previous easing cycles. Similarly, heightened geopolitical risks are pushing crude oil towards $64 a barrel, making bullish positions on oil futures a reasonable hedge against further instability.
