US stocks are going crazy! The Dow Jones surged 1200 points overnight, breaking 50,000 for the first time. Tech stocks staged a V-shaped recovery after a bloodbath. Who is the real winner?

This week (February 2nd to February 6th), the U.S. stock market experienced significant roller-coaster volatility. The first half of the week saw overall declines dragged down by selling pressure in tech stocks, while the second half, especially Friday, witnessed a strong rebound, with major indices collectively surging, culminating in the Dow Jones Industrial Average historically breaking through the 50,000-point mark.

$Dow Jones Industrial Average(.DJI.US) 

$S&P 500(.SPX.US) 

$NASDAQ Composite Index(.IXIC.US) 

Overall, the Dow Jones Industrial Average rose about 2.5% this week, closing at 50,115.67 points, setting a new all-time high. Friday's single-day surge of over 1,200 points (+2.47%) was the week's biggest highlight, also ending the previous three-week adjustment trend. In contrast, the S&P 500 Index fell slightly by 0.1% this week, closing at 6,932.30 points. Despite a nearly 2% surge on Friday, it still failed to fully erase the losses from earlier days. The Nasdaq Composite Index performed the weakest, falling 1.8% this week, marking its fourth consecutive weekly decline, even with a 2.18% rebound on Friday.

The core drivers of this week's movements can be summarized as follows:

1. Intense Rotation in Tech Stocks and AI Spending Concerns
The first half of the week saw significant selling in tech stocks, especially in AI-related sectors. Amazon announced a massive $200 billion capital expenditure plan for 2026 (primarily targeting AI infrastructure). While this is seen as a super positive for long-term AI demand, the high spending in the short term raised investor concerns about margin compression, leading to a sharp drop in Amazon's stock price and dragging down the entire tech sector. Mid-week, the Nasdaq saw notable declines, with some AI chip and software stocks under pressure.
However, market sentiment reversed quickly on Friday. Investors reinterpreted Amazon's huge AI investment as a signal of extremely strong industry momentum, driving a significant rebound in chip stocks like Nvidia and Broadcom, with Nvidia surging nearly 8% in a single day. This helped tech stocks recover quickly and contributed to the Nasdaq and S&P's strong gains on Friday.
 

2. Style Rotation: From Growth to Value/Cyclical Stocks
The most notable feature this week was the accelerated rotation in market styles. Dow components are mostly traditional blue-chips, cyclical, and industrial stocks, making them relatively resilient during the tech sell-off and even benefiting from capital flowing into the "old economy" sectors. Friday's strong performance of the Dow was a concentrated reflection of this rotation, as investors shifted from high-valuation tech stocks to more defensive and economically sensitive blue-chips.
Small-cap stocks (Russell 2000) were also active this week, surging over 3% on Friday, reflecting a recovery in market risk appetite towards the weekend and its spread to a broader range.
 

3. Macro Background and Bitcoin Linkage
There were no particularly heavy macro data releases this week (such as the non-farm payrolls report later this week or next week). However, the accumulated risk-aversion sentiment peaked mid-week, with Bitcoin plummeting over 50% (halving from its high), intensifying market panic. Bitcoin quickly rebounded above $70,000 on Friday, moving in sync with the stock market recovery, indicating a repair in overall risk asset sentiment.
Additionally, Federal Reserve policy expectations remained cautious. Market expectations for the pace of interest rate cuts were slightly adjusted but did not become a dominant factor.

In summary: The U.S. stock market was low early and high later this week. The intense volatility in tech stocks drove most of the fluctuations, but Friday's super rebound allowed the Dow to stand above the 50,000-point psychological level, which is symbolically significant. It also shows the market maintains high confidence in the long-term AI trend while capital begins to disperse towards value and cyclical sectors. In the short term, this style rotation may continue. However, if next week's tech giant earnings reports (such as from subsequent AI companies) continue to validate the growth driven by high capital expenditure, the market is expected to regain comprehensive upward momentum. Investors need to pay attention to the relative strength changes between tech and non-tech sectors.