AI stocks experienced a rebound, partly fueled by news that the $20 billion AI-focused hedge fund Situational Awareness sold a significant portion of its portfolio to Citadel. This move came as Situational Awareness faced pressure to raise cash due to margin calls on its amplified AI bets.

In corporate earnings, Microsoft shares surged 16% following strong cloud business growth and increased AI subscriber numbers. Conversely, Meta Platforms saw an 8% drop after raising its spending forecast and reporting shrinking free cash flow, despite which the company is continuing a significant spending spree.

Other tech giants showed mixed performance: Amazon stock rose 9% after its results, while Apple's shares declined 2.4%. Stocks previously held by Situational Awareness, including Sandisk and Nebius Group, surged over 25%, and SK Hynix rose 18%. The broader market also recovered from previous losses, with the Nasdaq Composite gaining 2.78% and the S&P 500 rising 1.66%.