U.S. stocks are up. Why have fears of a soft-apocalypse abated?

Major US stock market indices jumped on Tuesday, February 24, after investors reassessed the negative impact of AI on global business processes. A presentation by AI startup Anthropic showed that its tools will not replace software developers, but will strengthen them by enabling them to develop products using their AI Claude. That calmed the markets a bit and the Software Developers Sector ETF rose 2% after several days of declines.

- The broad market index S&P 500 rose by 0.8% at the end of trading on February 24.

- The blue-chip index Dow Jones Industrial Average also rose 0.8%.

- The Nasdaq Composite Technology Sector Index added just over 1%.

- The Russel 2000 index of small-cap stocks jumped 1.2%.

AI startup Anthropic, which has become a major threat to software developers over concerns that Claude Cowork's AI could recreate their products for end users, said Tuesday it can integrate with DocuSign products as well as tools like Google Drive and Gmail. That has optimized investors and eased fears that AI will undermine the business models of traditional players. Wall Street now expects it to complement software companies rather than displace them, CNBC notes.

DocuSign shares rose 2.6% after Anthropic's presentation, while optimism spread to other software stocks, with Salesforce gaining 4% and ServiceNow gaining 1.7%. The iShares Expanded Tech-Software Sector ETF, which tracks issuers in the sector, rose 2%, but is trading more than 30% below its one-year high.

Shares of chipmaker Advanced Micro Devices (AMD) soared 8.8% on Tuesday after Meta announced a multi-year agreement with it. The partnership involves the deployment of AMD GPUs for data centers with up to 6 gigawatts of aggregate capacity. Meta will also invest in AMD through a performance-linked warrant to buy up to 160 million shares of the company.

The message supported the securities of the manufacturer of network equipment for data centers Arista Networks - they rose by 1%. Quotes of rival Cisco Systems rose by 0.5%. Shares of the manufacturer of optical components and laser modules for telecom and data centers Lumentum Holdings added 2%, and the value of the supplier of photonic and laser technologies for industry and communications Coherent - 2.4%. The securities of Celestica, a contract manufacturer of electronics and server equipment, Arm Holdings, a developer of AMD processor architecture, and Taiwan Semiconductor Manufacturing Company (TSMS), a contract manufacturer of AMD chips, rose.

President Donald Trump's threats to raise global trade duties to 15%, as well as tensions between the U.S. and Iran, are still putting additional pressure on stocks. On Tuesday. Feb. 24, a 10 percent rate on imports of goods into the U.S. went into effect, replacing "reciprocal" duties that were overturned by a Supreme Court ruling.

- The market has been in "sell first, deal later" mode, which explains the magnitude of the software developers' decline, Anshul Sharma, chief investment officer at Savvy Wealth, noted in a conversation with CNBC. He said the current dynamic is a "classic relief rally" after a sell-off. He questioned the realism of a scenario in which AI will massively replace enterprise software in the coming months.

- Anthropic emphasized that Claude will integrate with existing systems, Vital Knowledge's Adam Crisafulli told Bloomberg. "The 'we're here to help, not hurt' message is contributing to a pretty healthy rally in the software sector," the analyst explained.

- Anthropic's presentation showed: the risk of competition for software vendors from AI is "exaggerated," Wedbush Securities analyst Dan Ives wrote. AI models can't replace entire workflows that remain "deeply embedded" in companies' software infrastructure, he argued. "The reality is that new AI tools will not 'uproot and replace' existing software ecosystems and data environments because their utility is limited by the volume and quality of the data they access," CNBC quoted the analyst as saying.

- "The risk of AI disrupting business models is not new, but the scale of the dramatization seems excessive," agrees Andrew Tyler, head of the Global Market Intelligence team at JPMorgan.

- Some of the concerns about artificial intelligence crowding out companies in certain sectors may be justified at the level of specific businesses, but for the market as a whole it will be a healthy cooling of excess optimism, said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "If this shift in investor psychology proves sustainable, it could reduce the likelihood of valuations becoming disconnected from reality, and that would create a more constructive environment for the state of the market over the long haul," he told Bloomberg.

- Traders are gearing up for Nvidia's earnings release, which is scheduled for Wednesday, February 25. The chipmaker's results will either "calm or exacerbate" fears around AI, says David Lauth of Kerux Financial. "We won't get all the answers as early as this week, but worried investors are hungry for clarity," Bloomberg quoted him as saying.

This article was AI-translated and verified by a human editor