U.S. software stocks rebound, boosting the Nasdaq to rise over 1%; Citron Capital shorts SanDisk Storage sector, which declines against the market trend

Eastern Time Tuesday (February 24), after multiple rounds of selling triggered by AI replacing “ghost stories,” U.S. stocks finally had a breather overnight, with the three major indices rebounding collectively, with the Nasdaq up over 1%. This rebound was driven by the recent AI star Anthropic, which signaled “collaboration rather than replacement” at its latest briefing, leading to an overall recovery in the software industry. Meanwhile, the storage sector, which has been hot recently, faced pressure as Citron Research launched a short attack on SanDisk, causing its stock to drop over 4%, and the sector weakened against the trend.

【US Stock Indices】

At the close, the S&P 500 rose 0.77% to 6,890.07; the Dow Jones increased 0.76% to 49,174.50; the Nasdaq gained 1.04% to 22,863.68.

At the latest briefing, Anthropic announced collaborations with a series of traditional software companies to jointly launch workplace AI agents. During the live event, Anthropic released 10 new AI plugin tools for the Claude Cowork agent. The company emphasized that its AI models help businesses grow, not replace existing operations.

Driven by this, U.S. software stocks rebounded collectively, with Salesforce up 4.1%, FactSet up 5.9%, and Thomson Reuters soaring 11.5%.

Wade Bush Securities’ research report released on Tuesday stated that Anthropic’s event shows that the competitive risk AI poses to the software industry has been exaggerated. They believe current AI models are not capable of replacing entire workflows, which remain “deeply embedded” in existing software infrastructure. The analysts wrote: “The reality is that these new AI tools will not completely disrupt and replace the existing software ecosystem and data environment. The scope of AI tools’ impact is ultimately limited by the data they can access.”

Some analysts also believe that yesterday’s market showed clear short-covering features. Goldman Sachs’ “most shorted” basket of stocks surged nearly 4%, marking the second-largest short squeeze of the year. Goldman’s chief technology trader Pete Callahan noted: After a period of heightened risk aversion and selling everything, today’s Nasdaq rose 1%, which doesn’t feel like a particularly exciting rally. This rebound stems from a special market mechanism: because downside hedging trades are extremely common, the S&P 500 can stay afloat because the market constantly needs negative news to sustain high hedging costs.

In stark contrast to the software sector, the storage industry faced pressure. Citron Research posted on Tuesday that it had established a short position on SanDisk, a leading storage stock. As a result, SanDisk’s stock plunged intraday, though it briefly recovered before closing down 4.2%.

Citron believes the market is pricing NAND storage companies as if they have long-term competitive advantages based on AI core assets, which is a clear mismatch. They argue that NAND remains a highly supply-dependent commodity industry, which historically peaks during high-margin phases. Meanwhile, Samsung, as the industry leader, could quickly eliminate the current “shortage” once capacity and yield rates recover and it ramps up high-end SSDs.

It’s worth noting that at 10 a.m. Beijing time today, Trump will deliver his annual State of the Union address to the U.S. Congress, with markets closely watching his comments on tariffs and recent geopolitical developments.

【US Treasury Bonds】

US Treasury yields hovered at low levels, with the benchmark 10-year yield closing at 4.039%, and the 2-year yield sensitive to Fed policy at 3.4650%.

【Popular US Stocks】

Among popular stocks, Nvidia rose 0.68%, Apple increased 2.24%, Google C fell 0.25%, Google A declined 0.19%, Microsoft gained 1.18%, Amazon up 1.60%, TSMC rose 4.27%, Meta up 0.32%, Tesla increased 2.39%, Wuzhi Semiconductor surged 8.77%, and Intel rose 5.71%.

On the news front, Meta and AMD announced on Tuesday that Meta will deploy up to 6 gigawatts of AMD computing chips, equivalent to a multi-year order worth $60 billion. Additionally, under certain milestone conditions, Meta can buy up to 160 million AMD shares at $0.01 each, representing 10% of the company.

Well-known Apple leaker Mark Gurman revealed that the first touch-screen MacBook Pro will debut this fall. These new models will feature a touch-optimized system interface and a “Dynamic Island” similar to the iPhone, but slightly smaller.

【Global Indices】

In Europe, the FTSE 100 fell slightly by 0.04% to 10,681 points. France’s CAC 40 rose slightly by 0.26% to 8,519 points. Germany’s DAX declined slightly by 0.02% to 24,986 points.

In Asia, the Hang Seng Index dropped 1.82% to 26,590 points. The China Enterprises Index fell 2.06% to 9,008 points. The Nikkei 225 rose 0.87% to 57,321 points.

【China Indices】

On February 24, overnight, Hang Seng Tech Index futures fell 2.18%, Nasdaq China Golden Dragon Index rose 1.37%, and FTSE China A50 Index increased 0.14%.

【Chinese Concept Stocks】

Among popular Chinese concept stocks, Tencent Holdings (HK) fell 3.35%, Alibaba rose 0.24%, Pinduoduo increased 1.06%, NetEase up 0.73%, Baidu declined 0.23%, Ctrip gained 1.59%, Li Auto rose 1.30%, Xpeng increased 6.75%, and NIO rose 0.19%.

【Forex and Commodities】

Following the Supreme Court’s abolition of old tariffs and the White House’s introduction of new import taxes, the dollar experienced volatile swings. On Tuesday, the dollar index rose 0.14% to 97.843.

Supported by dollar stability and profit-taking after recent gains, international spot gold prices retreated from near three-week highs around $5,250, dropping over $100 intraday before closing down 1.66% at $5,148 per ounce; London silver also fell 0.9% to $87.31 per ounce.

As US-Iran talks resume this week, oil market sentiment remains tense. The re-clarification of trade tensions also pressures the market. WTI crude oil fell 0.27% to $66.13 per barrel; Brent crude declined 0.39% to $71.21 per barrel.

【Key Highlights】

Major State of the Union Address Before the Election: Market Focuses on Trump, Tariffs, Cost of Living, Immigration, Geopolitics

Trump will deliver the State of the Union address at 10 a.m. Beijing time Wednesday, focusing on policies to address high living costs, such as requiring tech giants to bear AI power costs and reforming healthcare subsidies. After the Supreme Court rejected his key tariff policies, markets are watching for trade alternatives, while Middle East military build-ups have heightened geopolitical concerns.

Report: Trump Plans to Use AI to Set Key Mineral Reference Prices — Germanium, Gallium, Antimony, Tungsten First Included

The Trump administration plans to use Pentagon AI projects (OPEN) to set reference prices for critical minerals, aiming to build a global metals trade group. This mechanism will use AI models to estimate costs, supplemented by adjustable tariffs to secure pricing power. The first batch focuses on four metals: germanium, gallium, antimony, and tungsten, intending to attract allies and protect domestic miners through transparent pricing. While this boosts metals markets, the effectiveness of AI-based pricing and international cooperation remains questioned.

Fed Officials: Current Inflation “Not Good Enough” — Tariff Rulings Help Cool Inflation

Chicago Fed President Goolsbee said that the Supreme Court’s reversal of Trump’s emergency tariffs increases uncertainty but may help cool inflation. Policy uncertainty has led firms to hold back, but it could ease inflation pressures. He emphasized that broad evidence of inflation returning to 2% is needed to support rate cuts. Despite recent inflation exceeding expectations, markets have delayed rate cut expectations, but he remains optimistic about multiple cuts this year.

Fed Governor Warns: Monetary Policy May Be Unable to Address AI-Triggered Unemployment

Cook stated that AI has caused intergenerational shifts in the U.S. labor market, potentially raising unemployment. The Fed may be unable to cut rates to respond, leading to a dilemma: rate cuts may not effectively address structural unemployment and could push inflation higher; AI might initially raise, then lower, neutral interest rates; productivity data may take five to ten years to reflect AI impacts. Another Fed governor, Waller, said that Citrini’s report on Monday’s big drop in software stocks “exaggerates AI’s potential impact on employment,” emphasizing that AI is a tool, not a human replacer.

AMD Deeply Tied to Meta — $100 Billion Order Materializes, Long-Term Five-Year Deal Challenges Nvidia

Meta and AMD reached a five-year strategic agreement for AMD to supply 6 GW of computing chips and deeply customize the MI450 processor. Meta gains warrants in exchange for procurement, potentially holding 10% of AMD. This move aims to secure computing power supply and diversify dependence from Nvidia, marking a deepening of AI giants’ supply chain reshaping and global computing race.

SanDisk Short Seller Citron Calls Supply Tightness a “Mirage,” Cycle Nearing Peak

Citron’s short thesis has three main reasons: Samsung’s competition, Western Digital’s recent reduction of SanDisk holdings, and historical cycle peaks. Citron states Samsung won’t sell below 50% gross margin and is entering SanDisk’s core SSD market with advanced chips; capacity is now twice the 2018 peak, ready to flood the market, potentially reversing the supply-demand balance in one earnings call; don’t price SanDisk like Nvidia—Nvidia has a moat, SanDisk is a commodity.

Iran Says Ready to Take Measures to Reach Deal with US

On Tuesday, oil prices retreated from nearly seven-month highs earlier in the day, as Iran indicated willingness to take necessary measures to reach an agreement with the US before later this week’s nuclear talks.

Oman’s Foreign Minister Badr al Busaidi said Iran, OPEC’s third-largest oil producer, will hold a third round of nuclear talks with the US in Geneva on Thursday.

White House Economist Calls Citrini’s AI Risk Report “Science Fiction”

White House Council of Economic Advisers Acting Chair Pierre Yared dismissed Citrini Research’s report on AI causing mass unemployment and dragging down stocks as “science fiction,” stating it violates basic economic principles. Yared said innovation always involves some volatility and chaos, which is normal. He focuses on “research findings” rather than “apocalyptic scenarios in science fiction.”

Stripe Considering Acquiring PayPal, Rumors Rise

PayPal surged 6.73% in late trading Tuesday. Rumors suggest payment processor Stripe is interested in acquiring all or part of PayPal’s assets. Earlier Tuesday, Stripe announced a valuation of $159 billion in an employee offering.