IT Stocks: Technology shares including recovered part of their recent losses in overnight deals on Wall Street on Wednesday, February 18, as investor sentiment improved following a sharp artificial intelligence AI-led sell-off earlier this month. Indian IT stocks including TCS, Infosys, HCL and others are also likely to be in focus today, February 19 after the rebound in tech stocks last night. In the previous session, Nifty IT index lost 1.23%.
The rebound came amid renewed optimism around AI spending, particularly after Nvidia announced a major long-term deal to supply Meta Platforms with millions of its current and future artificial intelligence chips.
Technology stocks had been under pressure since last week, as concerns grew that rapidly advancing AI tools could disrupt existing business models across industries. The uncertainty weighed heavily on U.S. equities in February, triggering declines across several sectors ranging from software services to transportation and logistics. Investors had also turned cautious amid fears that aggressive AI adoption could compress margins for some companies while reshaping competitive dynamics faster than anticipated.
Against this backdrop, markets reacting positively to signs that big technology players continue to commit large capital toward AI infrastructure.
Nvidia–Meta Partnership, Software Stocks Drive Recovery
The S&P 500 software and services sector, which had witnessed heavy selling earlier in the month, rose 1.4% on Wednesday.
The gains were led by a sharp rally in Cadence Design Systems, which jumped 9.5% after the chip-design software firm reported fourth-quarter revenue that exceeded market expectations. The results helped restore confidence in companies supplying tools and platforms critical to semiconductor and AI development.
Adding to the positive tone, Meta Platforms’ announcment of a long-term partnership with Nvidia under which it will deploy millions of Nvidia’s chips and other equipment across its artificial-intelligence data centers. While Meta’s stock initially fell as much as 1.7% in early trade—reflecting concerns around higher capital expenditure—it later reversed course to close 0.6% higher as investors digested the strategic significance of the deal.
Broader technology stocks also participated in the recovery. Infosys ADRs rose 2%, while Wipro gained 0.44%. U.S.-listed IT services firms saw solid gains, with EPAM advancing 2.2%, Globant climbing 2.06%, Cognizant rising 2.5%, and Accenture adding 1.6% in overnight trade.
The broader market reflected the improved risk appetite. The S&P 500 rose 0.6%, moving closer to its all-time high set late last month. The index gained 38.09 points to end at 6,881.31. The Dow Jones Industrial Average added 129.47 points, or 0.3%, to close at 49,662.66, while the Nasdaq Composite climbed 175.25 points, or 0.8%, to 22,753.63.
Dollar and US Fed Minutes
On the policy front, expectations around interest rates remained mixed. The Federal Reserve has paused interest rate cuts for now, though many on Wall Street continue to expect easing later this year, most likely during the summer, after a new chair is scheduled to take over at the central bank. However, minutes released on Wednesday from the Fed’s last meeting showed several officials want clearer evidence of falling inflation before supporting additional rate cuts in 2026. The minutes also revealed that some policymakers remain open to rate hikes if inflation stays elevated.
In currency markets, the dollar held on to gains on Thursday, supported by better-than-expected U.S. economic data and the cautious tone of the Fed minutes. Sterling slipped close to a one-month low at $1.3488 against the dollar, while the yen hovered near the 155-per-dollar mark and was last quoted at 154.80.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
