Major market indices closed higher, driven primarily by a technical rebound from the previous day's excessive sell-off, and heightened market expectations that weak employment data could prompt the Federal Reserve to cut interest rates.

1. "Buying the dip" after technical oversold conditions

On Thursday, February 5th, U.S. stocks experienced a broad and sharp sell-off, with the Nasdaq recording its worst three-day sell-off since last April, particularly in the software sector. This rapid decline led to technically oversold market conditions. On February 6th, some investors, believing the sell-off was overdone, began bottom-fishing, driving a technical rebound in the indices.

2. Weak employment data strengthens "rate cut expectations"

This is the key macro factor for the shift in sentiment. A series of employment data released on February 5th were significantly weaker than expected:

U.S. December JOLTS job openings** fell to 6.54 million, the lowest since September 2020.

U.S. January Challenger job cuts** reached 108,000, the highest for the period since 2009.

Weekly initial jobless claims also grew more than expected.

These data points collectively paint a picture of a rapidly cooling labor market. The market interpreted this as signs of economic weakness that could prompt the Fed to cut rates earlier and more aggressively to support the economy. Expectations of lower interest rates are favorable for the stock market, especially for interest-rate-sensitive growth stocks. Traders therefore increased their bets on rate cuts this year, steepening the U.S. Treasury yield curve.

3. Reassessment of the "software stock apocalypse" panic

The trigger for the previous day's plunge was market concerns that AI would disrupt the business models of traditional software companies. On February 6th, market sentiment saw a partial correction. Some views began to emerge that the market may have mistakenly sold off some software companies with strong fundamentals focused on core processes, which could instead be the "cornerstones" of the AI era. This slight adjustment in expectations drove an oversold rebound in the software sector.