By Connor Smith
A Citrini Houdini. A furious rebound in risk assets lifted Wall Street out of this week's early hole.
The S&P 500 gained 0.8% today, while the Nasdaq Composite rose 1.3%. The Dow Jones Industrial Average was up 308 points, or 0.6%.
The top-performing strategies on Wednesday were momentum, risk, and technology. Crypto, crypto-linked assets, and meme stocks all joined the party.
After starting the week down 1.1%, the Nasdaq is now up 1.2% for the week. The S&P 500 is up 0.5% on the week. The Dow is down just 0.2% after falling 1.7% on Monday.
The rebound represents a sharp recovery from Monday, when a viral blog written by James van Geelen, of Citrini Research, and his colleague, Alap Shah, prompted a wave of speculative selling in financials and consumer discretionary stocks, especially. The Citrini selloff latched onto the market's recent paranoia that artificial intelligence could ravage established players in a range of industries.
Mizuho's Daniel O'Regan writes that the rebound followed an Anthropic enterprise event on Tuesday where the AI company emphasized partnerships over conflict.
"Monday felt as panicked as our flows have been, particularly in software, but also across the [technology] sector," wrote Jefferies managing director of equities trading Michael Toomey.
Wall Street also had more time to digest the Citrini scenario and offer counterarguments. Here's Citadel Securities macro strategist Frank Flight:
For AI to produce a sustained negative demand shock, the economy must see a material acceleration in adoption, experience near-total labor substitution, no fiscal response, negligible investment absorption, and unconstrained scaling of compute. It is also worth recalling that over the past century, successive waves of technological change have not produced runaway exponential growth, nor have they rendered labor obsolete.
Instead, they have been just sufficient to keep long-term trend growth in advanced economies near 2%. Today's secular forces of aging populations, climate change and deglobalization exert downward pressure on potential growth and productivity, perhaps AI is just enough to offset these headwinds. The macroeconomy remains governed by substitution elasticities, institutional response, and the persistent elasticity of human wants.
Whatever the reason for the escape from Monday's depths, Harry Houdini has nothing on the Nasdaq Composite.
"It feels like a long week but it's only Wednesday," O'Regan writes.
Despite the big rally Wednesday, the real action came after the close. More on that below.
The Hot Stock: Axon Enterprise +17.6% The Biggest Loser: GoDaddy -14.3%
Best Sector: Technology +1.8% Worst Sector: Industrials -0.8%
Nvidia Strikes Again
Did we mention Nvidia earnings were today? Though most of the megacap technology stocks that make up the Magnificent Seven report quarterly results in quick succession, Nvidia saves its report for the end of earnings season.
Its results were a clear hit.
Nvidia reported adjusted earnings of $1.62 per share, beating the consensus among analysts of $1.53, my Barron's colleague Adam Levine reports. Data-center sales also jumped 75% to $62.3 billion.
The firm's outlook for first-quarter revenue of $78 billion was ahead of expectations of $73 billion. Adam writes:
Never shy to tout his company's successes, Nvidia CEO Jensen Huang was enthusiastic in Nvidia's earnings release this afternoon:
"Computing demand is growing exponentially," he said. "Enterprise adoption of agents is skyrocketing. Our customers are racing to invest in AI compute -- the factories powering the AI industrial revolution and their future growth."
During the company's earnings call, Huang replied to a question about the firm's AI company investments by saying "our investments are focused very squarely, strategically on expanding and deepening our ecosystem reach." Huang also implied that memory chip shortages wouldn't dent the firm's mid-70s gross profit margin.
Despite all the big numbers, the stock gave back its initial after-hours gains. As Nvidia's conference call ended, the stock was up just 0.6%.
You can read Adam's comprehensive coverage on Nvidia earnings here.
The Calendar
AES, Autodesk, Block, Canadian Imperial Bank of Commerce, CoreWeave, Dell Technologies, Emcor Group, Hormel Foods, Intuit, J.M. Smucker, Monster Beverage, NetApp, Public Service Enterprise Group, Qnity Electronics, Rocket Cos., Rocket Lab, Royal Bank of Canada, SBA Communications, Sempra, Solventum, Viatris, Vistra, Warner Bros. Discovery, and Zscaler announce earnings tomorrow.
What We're Reading Today
-- Netflix Stock Gains. The Market Is Betting It Loses Warner to Paramount
-- C3.ai Stock Drops on Another Rough Quarter. The CEO Has More Work to Do.
-- Trump Says His Tariffs Could Replace Income Taxes. Here's What Tax
Experts Say.
-- Salesforce Stock Drops Despite Earnings Beat. Agentforce Demand Rises.
-- Circle Internet Stock Surges After Earnings. What Crypto Worries?
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February 25, 2026 19:55 ET (00:55 GMT)
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