Those gains came after Asian markets closed sharply today. Japan’s Nikkei 225 rose 3.92%; the South Korea KOSPI rose 6.84%.

Two factors pushed markets back to record highs this morning:

• Palantir’s results show that AI spending is set to continue for the foreseeable future—putting fears that AI is a bubble on the backburner.
• And the Institute for Supply Management’s manufacturing index yesterday showed a sharp and unexpected increase in optimism among factory purchasing executives, boosting non-tech stocks.

So the tech-heavy Nasdaq and the broader S&P both rose though Nvidia, Oracle, Meta, Microsoftand Tesla—Magnificent 7 stocks with the power to move the entire market—all declined.

Ohsung Kwon and his team of analysts at Wells Fargo noted that 167 companies in the S&P 500 have reported Q4 earnings so far—and their earnings were 5% above consensus. Additionally, 68% of companies said they expect to increase their capital expenditures (“capex”) more than analysts expected. “We expect higher capex … and volume growth in 2026,” he told clients.

All that spending suggests that AI companies won’t run out of money anytime soon.

Palantir’s results are so strong that some on Wall Street think this level of growth may not be sustainable. At Jefferies, Brent Thill and his team warned of “tougher developments ahead,” meaning that both percentage growth in revenues and earnings are likely to slow down in the future. “PLTR has delivered 10 consecutive Qs of accelerating growth, which means comps will continue to be in high demand,” they told clients.

They are also concerned about Palantir’s ability to add new customers quickly. “While revenue growth is increasing, the growth in the number of customers is actually decreasing,” they said. Palantir’s customer growth was 5% in Q4, compared to 7% in Q3 and 10% in Q2they said.

The development of the manufacturing index was a general surprise, according to Jim Reid and his colleagues at Deutsche Bank: “That ISM manufacturing print is critical, because it reinforces the prevailing narrative of strong data resilience, which supports the markets despite the series of strange headlines in recent weeks. In fact, the headline print returned to expansionary territory at 52.6 in January (52.6) Bloomberg economist estimate.

Lawrence Werther and Brendan of Stuart Daiwa Capital Markets said it was close ALSO surprising. They created these charts that show how out-of-line with the trend the new numbers are:

And they warn that next month’s figures may see a change in the norm: “Concerns related to trade policy are abundant in the comments submitted to the survey, with headwinds arising from the current tariff agenda continuing to contribute to the negative assessment of survey respondents,” they advised clients in a note. “Details from the survey show that the Trump administration’s trade policy has contributed to the postponement of long-term planning decisions, volatility in supply chains, and reduced profits.”

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

• S&P 500 futures rose 0.14% this morning. The last session closed at 0.54%.
• STOXX Europe 600 rose 0.16% in early trading.
• The UK’s FTSE 100 down 0.41% in early trading.
• Nikkei 225 in Japan increased by 3.92%.
• CSI 300 in China increased by 1.18%.
• The South Korean KOSPI increased by 6.84%.
• NIFTY 50 in India increased by 2.55%.
• Bitcoin decreased to $78.1K.