Markets Rebound as Meta's $100B AMD Chip Deal Anchors AI Relief Rally

U.S. equities staged a broad recovery on February 24, with the Dow Jones Industrial Average gaining 391.94 points (+0.80%) to close at 49,196, the S&P 500 rising 0.79% to 6,891.93, and the Nasdaq Composite climbing 1.07% to 22,870.37. The rebound followed a steep sell-off on February 23, when the Dow dropped more than 800 points amid converging tariff fears and AI disruption concerns.

Monday's decline was triggered by two forces: President Donald Trump's announcement raising global tariffs to 15% from 10%—effective immediately—and a blog post from Anthropic describing how its Claude AI could help modernize legacy COBOL code. That post sent IBM shares plummeting 13.15%, their worst single-day decline since 2000, as investors reassessed enterprise tech incumbents' exposure to AI-driven disruption.

On February 24, software and technology stocks led the recovery as investors appeared to moderate their reaction to the AI disruption narrative. The Meta-AMD deal reinforced broad-based AI infrastructure demand, while analysts noted markets may have overreacted to near-term disruption risks. The 15% global tariff remains in effect, continuing to represent a source of market uncertainty heading into the rest of the week.

Home Depot reported fiscal fourth-quarter adjusted earnings per share of $2.72 on February 24, surpassing the Wall Street consensus estimate of $2.54 according to LSEG data. Revenue for the quarter came in at $38.2 billion, narrowly beating expectations of $38.12 billion—the first earnings beat for the home improvement retailer in four consecutive quarters.

For the full fiscal year, Home Depot reported revenue of $164.68 billion and adjusted EPS of $14.69, both modestly above analyst forecasts. Same-store sales grew 0.3%, exceeding the 0.2% Wall Street estimate. The company also raised its quarterly dividend to $2.33 per share, a signal of management confidence in the business outlook despite a subdued housing market environment.

Looking ahead, Home Depot guided for fiscal 2026 total sales growth of 2.5% to 4.5%, comparable sales growth of flat to 2.0%, and adjusted EPS growth of flat to 4.0% relative to the $14.69 base. Shares gained approximately 3.5% in premarket trading on the results, and the stock continued to climb during the session, contributing to the Dow's broader recovery.

Nvidia is scheduled to report fiscal fourth-quarter earnings after the close of trading on February 25, with Wall Street analysts expecting earnings of $1.53 per share—a 71.9% year-over-year increase—on revenue of approximately $65.7 billion, which would represent a 67% gain from the prior-year period. Meeting consensus would bring Nvidia's total annual revenue for fiscal 2026 to roughly $213.3 billion, according to S&P Global Market Intelligence data.

The report arrives at a moment of elevated investor scrutiny around AI spending sustainability. Analysts note that while demand for Nvidia's chips has consistently driven earnings beats, growing questions surround whether hyperscale cloud providers may moderate capital expenditures. Key areas of focus include guidance for Nvidia's Blackwell GPU architecture and the company's ability to maintain growth as the initial AI infrastructure build-out phase matures.

According to CNBC, the earnings release will 'collide with Wall Street skepticism over AI spending.' The broader software and chip sector recovery on February 24—anchored by the Meta-AMD deal—provided a constructive backdrop heading into the announcement. Analysts have upwardly revised Nvidia's EPS estimates three times in the past 30 days, reflecting persistent confidence in near-term demand driven by supply constraints.