Tech Rally Builds on PMI Strength

The Nasdaq Composite traded at 23,592.11 as of Monday’s close, up 0.56% on the session, extending gains after U.S. stocks started February on a firmer footing. Investors pushed equities higher following encouraging manufacturing data and easing trade tensions. 

The advance came despite lingering volatility from last week’s sharp moves in precious metals and renewed debate around artificial intelligence valuations. Could the tech-heavy index maintain its upward momentum?

Manufacturing Data Sets the Tone

U.S. stocks closed higher on Monday after data showed the manufacturing sector expanded for the first time in a year. The Institute for Supply Management’s Purchasing Managers’ Index rose to 52.6 in January, well above expectations and December’s reading. 

A separate S&P Global survey also showed expansion. New orders and production strengthened, signaling improved activity early in the year. Treasury yields moved higher in response, reflecting firmer growth expectations rather than inflation fears.

Trade Deal Lifts Sentiment

Markets also reacted to news that the United States and India reached a trade agreement. President Donald Trump announced a reduction in tariffs on Indian goods to 18%, down from 25%, alongside the removal of a secondary tariff after India agreed to halt purchases of Russian oil. 

The development boosted confidence in global trade flows. Stocks tied to India exposure, including Infosys and Williams-Sonoma, rallied as investors adjusted expectations around costs and demand.

Tech and AI Stocks Regain Leadership

Technology shares led Monday’s gains, helping the Nasdaq outperform. Alphabet rose, while Amazon also advanced ahead of upcoming earnings reports. Semiconductor stocks also climbed as investors returned to AI-linked themes. 

SanDisk surged sharply, while Advanced Micro Devices and Micron Technology posted solid gains. After recent pullbacks tied to valuation concerns, traders refocused on earnings growth and revenue visibility within the sector.

Earnings Momentum Anchors the Rally

Corporate earnings continued to support equity prices. Analysts now expect S&P 500 companies to deliver nearly 11% earnings growth for the December quarter, up from earlier estimates, according to LSEG. 

More than 80% of reporting firms have exceeded forecasts so far. Strong revenue performance and margin discipline have shifted attention toward measurable results. For large-cap tech firms, earnings linked to cloud and artificial intelligence spending remain a central driver.

Dow and Broader Market Context

The Dow Jones Industrial Average rose more than 500 points, while the S&P 500 added about 0.5%, finishing just below its record high. Investors looked past last week’s dramatic sell-off in gold and silver, which had briefly rattled confidence. 

The rebound in equities suggested selective risk-taking rather than broad speculation. Meanwhile, the Russell 2000 lagged during the prior week, highlighting caution toward smaller, more cyclical companies.

Jobs Data Delay and Policy Watch

A partial government shutdown delayed the release of Friday’s nonfarm payrolls report, complicating near-term policy signals. Federal Reserve officials will meet later in the month without fresh labor data, increasing the importance of other indicators such as PMIs and earnings. 

Source: US Bureau of Labor Statistics via X

Market participants continue to monitor interest rate expectations, trade developments, and corporate guidance. With volatility still present, the Nasdaq’s direction may hinge on whether economic resilience and earnings strength continue to offset policy uncertainty.