What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded from a week of heavy selling.
This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Digital Media & Content Platforms company Rumble (NASDAQ: RUM) jumped 8%. Is now the time to buy Rumble? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company CECO Environmental (NASDAQ: CECO) jumped 7.4%. Is now the time to buy CECO Environmental? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Knowles (NYSE: KN) jumped 8.6%. Is now the time to buy Knowles? Access our full analysis report here, it’s free.
- Specialized Technology company Cognex (NASDAQ: CGNX) jumped 7.2%. Is now the time to buy Cognex? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Flex (NASDAQ: FLEX) jumped 7%. Is now the time to buy Flex? Access our full analysis report here, it’s free.
Zooming In On Knowles (KN)
Knowles’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 3.5% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
Knowles is up 22.9% since the beginning of the year, and at $26.99 per share, has set a new 52-week high. Investors who bought $1,000 worth of Knowles’s shares 5 years ago would now be looking at an investment worth $1,310.
The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave, it’s free.
