The AI love-hate trade roars as Meta-AMD $100 billion deal cheers traders’ spirits after doom spiral

Fortune

by Stan Choe, The Associated Press

February 24, 2026

AI-Generated Deep Dive Summary

U.S. stocks rebounded Tuesday, driven by renewed optimism surrounding the potential benefits of artificial intelligence (AI). The S&P 500 climbed 0.8%, recovering nearly three-quarters of its previous day’s sharp decline. The Dow Jones Industrial Average gained 370 points, or 0.8%, while the Nasdaq composite rose 1%. Advanced Micro Devices (AMD) led the rally, surging 8.8% after announcing a multiyear deal with Meta Platforms to supply chips for AI development. Under the agreement, Meta also secured the right to purchase up to 160 million AMD shares at $1 each, contingent on chip volume purchases. This deal highlighted the excitement surrounding AI’s growth and its potential to transform industries. The market reversal came after a day of heightened concerns about AI’s downsides, which had sent stocks tumbling. Industries seen as vulnerable to AI disruption, such as software, trucking logistics, and financial services, were particularly hard-hit on Monday. However, Tuesday’s rally suggested investors were recalibrating their fears. IBM, for instance, rebounded 2.7% after a 13.1% drop the previous day, its steepest decline since 2000. Similarly, Salesforce and AppLovin saw gains as fears about AI competition lessened. The market also received a boost from positive earnings reports. Keysight Technologies surged 23.1%, the biggest gain in the S&P 500, after exceeding analyst expectations for profit and revenue. Home Depot also rose 2% despite CEO Ted Decker’s caution about consumer uncertainty. These strong results added to the positive sentiment, offsetting concerns about AI-related risks. Elsewhere, global markets showed mixed movements. In Europe, indexes were modestly volatile, while Asian markets saw larger swings—South Korea’s Kospi climbed 2.1%, and Hong Kong’s Hang Seng fell 1.8%. The bond market remained steady as U.S. consumer confidence improved more than expected, with the 10-year Treasury yield holding at 4.03%. The AI-driven rally reflects a broader shift in investor sentiment. While fears about job displacement and industry disruption persist, Tuesday’s gains underscored the belief that AI could also create new opportunities. As companies like Anthropic unveil

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Originally published on Fortune on 2/24/2026