Billionaire Ken Griffin's Citadel struck a deal with embattled hedge fund Situational Awareness, helping trigger a relief rally in global AI stocks. The transaction halted a downward spiral in the still-frothy artificial intelligence trade, offering a brief respite after weeks of volatility.

Traders are now debating whether the worst of the AI selloff is over or if more market turbulence lies ahead. The Citadel agreement injected confidence into a sector that had been reeling from profit-taking and macroeconomic concerns, with major AI-related equities bouncing from recent lows.

While the rally provided immediate relief, analysts caution that fundamental valuations remain elevated. The Situational Awareness deal may represent a tactical floor rather than a sustained recovery, leaving investors wary of renewed downside pressure in the coming sessions.