Stocks on Wall Street mounted a notable rebound over February 17 and 18, 2026, as investors shook off recent anxieties about artificial intelligence disruption and found renewed optimism in a string of encouraging economic reports. The mood, which had been jittery just days before, shifted as chipmakers, software firms, and major technology stocks led the charge, while ongoing geopolitical tensions and central bank uncertainty added a complex backdrop to the market’s moves.
According to Bloomberg, roughly 320 shares in the S&P 500 rose on February 17, as investors sought signs that the recent rout—fueled by fears of AI upending established businesses—might finally be bottoming out. A gauge of chipmakers climbed 1%, while a key ETF tracking software firms gained 1.3%. The rebound came even as minutes from the latest Federal Reserve meeting revealed that "several" officials believed the central bank might need to raise interest rates if inflation stayed stubbornly above target. Treasuries, meanwhile, fell for a second straight day, and oil prices jumped as traders weighed both economic and geopolitical risks.
The following day, February 18, saw the momentum continue, albeit at a more measured pace. TheStreet’s closing bell update reported that the Nasdaq led major indexes with a 0.78% gain, followed by the S&P 500 (+0.56%), Russell 2000 (+0.45%), and Dow Jones (+0.26%). Energy stocks surged 1.89%, buoyed by a spike in oil prices, while technology shares rose 1.08%. Not every sector joined the rally: utilities, real estate, and staples all ended the day lower.
Much of the early optimism on February 18 could be traced to Meta Platforms’ announcement that it would purchase millions of Nvidia AI chips for its expanding data center buildout. The news helped float equity benchmarks from the opening bell, with the Russell 2000 and Nasdaq quickly posting gains above 1%. As TheStreet noted, “the positive AI news has helped float equity benchmarks this morning.”
Economic data released that morning added fuel to the rally. Reports on housing and manufacturing showed resilience in key segments of the U.S. economy. Housing starts in December 2025 rose to 1.322 million, up 3.9% month-over-month, while building permits climbed 4.3% to 1.448 million. Durable goods orders, though down 1.4% for the month, beat expectations and marked a significant improvement from November’s 5% decline, which had coincided with a lengthy government shutdown. As TheStreet put it, “most of that data is positive; housing starts and preliminary permit data rose year-over-year in December, ending the year on strong footing after a cooler October and November report.”
With the market’s attention fixed on the Federal Reserve, the release of the Federal Open Market Committee (FOMC) minutes created fresh debate about the path of interest rates. The minutes, as reported by TheStreet, revealed a split among officials: while most agreed to hold rates steady in January at 3.50% to 3.75%, some indicated a willingness to cut rates if inflation were to decline, while others argued for raising rates should inflation persist. The balance between labor market strength and inflation was described as more equal than in previous months, a shift underscored by January’s small decline in the unemployment rate. The minutes stated, “various members indicated that rates could be cut in the event that inflation were to decline. Others indicated that rates could be raised if inflation continued to prove inconvenient to regular business.”
Geopolitical tensions added another layer of complexity. Oil prices soared above $60 per barrel, rising more than 4% to $64.22, as gold and silver also posted significant gains. TheStreet attributed the surge to “geopolitical jitters,” as hundreds of U.S. military assets—including planes, aircraft carriers, and fighter jets—were mobilized to Europe, apparently in preparation for a possible confrontation with Iran. The situation escalated further after Vice President JD Vance stated that Iran had failed to meet key U.S. demands in nuclear talks that week, warning that military force remained an option if diplomacy failed. “President Donald Trump could still use military force if diplomacy does not stop Iran’s nuclear program,” Vance said, according to reporting from TheStreet and other outlets.
The market’s resilience in the face of such uncertainty was underpinned by robust performances from technology leaders, especially those in the so-called “Magnificent Seven,” as well as financial and energy stocks. As noted by TipRanks, these sectors were instrumental in lifting the S&P 500, Nasdaq, and Dow Jones by 0.6%, 0.8%, and 0.3%, respectively, on February 18. Futures trading in the early hours of February 19 remained steady, with traders eyeing Walmart’s upcoming quarterly earnings and awaiting fresh data on weekly jobless claims and pending home sales.
Despite the upbeat tone, not all market watchers were ready to declare victory. The minutes from the Fed’s January meeting made clear that the central bank’s next moves remain uncertain, with policymakers closely monitoring both inflation and the labor market. TheStreet’s analysis pointed out that “labor data remains an important element in decision-making as well, but FOMC Minutes indicated that the balance of the labor market and inflation were more equal, a factor which has only been furthered by January’s small decline in the unemployment rate.”
The interplay between economic fundamentals and external shocks—such as the AI-driven transformation of industries and the specter of conflict with Iran—has made for a volatile but resilient market environment. Investors are clearly weighing the risks and rewards with each new headline, as evidenced by the day-to-day swings in equity, bond, and commodity markets.
Looking ahead, all eyes are on Walmart’s earnings report and the next rounds of economic data, which could provide further clues about the health of the U.S. consumer and the broader economy. As traders and analysts digest the latest numbers and central bank signals, the market’s ability to withstand shocks—be they technological, geopolitical, or monetary—will continue to be tested.
The past two days have shown that, for now, optimism can prevail even in uncertain times. But with so many variables in play, from AI to Iran, the story of the markets in 2026 is far from finished.