Technology shares continued their recovery on Wall Street as investors weighed concerns about artificial intelligence against potential buying opportunities. U.S. markets extended Friday's rebound on Monday, with the S&P 500 approaching its record high once again. The Nasdaq 100 Index closed 0.8% higher, reclaiming its critical 100-day moving average. Friday saw the Dow Jones Industrial Average surge over 1,200 points, breaking the 50,000 mark for the first time, while the S&P 500 erased its weekly losses. Investors appeared to view last week's sell-off as an "overreaction" and a prime buying chance, prompting significant capital inflows during the period of market volatility. However, underlying investor concerns have not dissipated. Doubts remain about whether AI investments will deliver the expected profits. Even during Friday's rally, Amazon shares fell 5.6%, wiping approximately $133 billion from its market value. Alphabet's stock also declined by 2.5%. This pattern of sharp declines followed by rapid gains has left investors increasingly vigilant about where the next risk point might emerge. Key economic data scheduled for release this week, including the delayed January jobs report and the latest inflation figures, could further influence the direction of interest rate policy and overall market sentiment.

**Technology Sector Leads the Rebound, but AI Spending Worries Linger** The technology sector showed particular strength on Monday. Previously hard-hit software and semiconductor stocks rallied significantly, with Oracle soaring nearly 10%. A weaker U.S. dollar provided additional support for risk assets and gold, fostering a relatively optimistic market mood ahead of critical economic reports. A senior global investment strategist commented: "The bull market remains intact. We would view any pullback as a genuine opportunity to re-enter the market." Yet, despite the stock market rebound, tension surrounding massive AI investments continues to loom. A chief global strategist noted: "Artificial intelligence appears quite intelligent in programming. Companies won't abandon software embedded in all their systems overnight, but as a long-term challenge, AI presents a reasonable threat to the software sector." Last week's plunge was triggered by investor fears that AI-driven disruption could be more widespread than anticipated, coupled with anxiety over whether tech companies' massive investments in AI infrastructure would yield the anticipated high profits. These concerns persist. Analysts from Jefferies informed trading clients that hedge funds have been reducing their exposure to software stocks for some time. At its peak, the selling was described as "extreme" and "completely price-insensitive." This sell-off and its ripple effects have prompted investors to re-evaluate AI's dominant role in the stock market and the broader economy. A long-standing concern is that the staggering gains in AI-related stocks in recent years have made the market overly reliant on a handful of tech giants. Furthermore, massive spending on AI by the world's largest companies might be masking broader economic weakness.

**Weak Economic Data Heightens Uncertainty** Recent data has provided little reassurance. According to the Labor Department's monthly report, U.S. job openings decreased by nearly one million last year. Estimates from ADP showed that private sector employment increased by only 22,000 jobs in January, less than half of market expectations. The delayed release of the January nonfarm payrolls report, postponed due to a brief government shutdown and now scheduled for this Wednesday, has further clouded investors' assessment of the economy. A strategist stated: "The economic data is quite soft. We have a mediocre economy at best supporting an exceptionally strong stock market, which I believe is part of the problem." As investors retreated from tech stocks, there were signs of capital rotating into other sectors. The consumer staples sector became the best-performing group in the S&P 500 last week. Investors typically view this sector as a defensive play, as people continue to purchase essential goods even during an economic slowdown. Data from Cboe Global Markets indicated that the options "skew" for the iShares Russell 2000 ETF, which tracks small-cap companies, reached its highest level since November earlier this week. A higher skew often suggests that put options, used for hedging against declines, are priced higher relative to call options. The chief investment officer of Bellwether Wealth in Nebraska stated that his firm plans to reduce its exposure to technology stocks and use the proceeds to increase holdings in industrial and materials companies. The CIO said: "It makes you worry about what other areas are driven almost purely by speculation." Although some investors anticipate that strong corporate earnings will help propel the market higher—FactSet data suggests S&P 500 companies' profits could grow by 14% in 2026—many still expect volatility to persist into early 2026. The CIO added: "I don't want to paint this as a doomsday scenario, but I believe volatility will stick around for a while."