Closing Bell: Stocks Rally as Ceasefire Expectations Lift Sentiment

Key Points

• Equities moved higher as renewed hopes for a near‑term ceasefire improved risk sentiment.
• Arm shares jumped after unveiling a new AI data‑center CPU, signaling a major pivot from its licensing model to producing its own chips.
• Chewy delivered mixed Q4 results, but strong free cash flow, sustained customer growth, and an upbeat FY 2026 outlook.

Markets moved higher during the session as renewed hopes for a near‑term ceasefire lifted sentiment. The S&P 500 (SPX) gained 0.54% and the Nasdaq‑100 (NDX) advanced 0.67%, while the Russell 2000 (RUT) once again outperformed, rising 1.23%. Materials, Consumer Discretionary, and Health Care led the advance, while Energy and Real Estate lagged.

Arm Shares Surge on Bold Pivot to AI Data‑Center Chips

Arm (ARM) shares surged after the company unveiled a new AI data‑center CPU, marking a major strategic shift from its traditional licensing model toward producing its own high‑performance chips. The move positions Arm to capitalize on the rise of “agentic AI” and inference workloads, broadening demand for CPUs alongside GPUs. While the pivot unlocks significant long‑term revenue potential, it also raises execution risk as Arm enters direct competition with established chipmakers in an increasingly crowded AI market.

Chewy Delivers Mixed Q4 Results but Strong Cash Flow Drives Shares Higher

Chewy (CHWY) delivered mixed Q4 results, with revenue rising modestly to $3.26 billion and adjusted EPS narrowly missing expectations, though profitability and cash generation remained strong. Free cash flow surged 48% year over year to $232 million, supported by the continued strength of Autoship, which now accounts for 84% of sales, and growing operational efficiency from automated fulfillment centers. Active customer growth extended for a fifth straight quarter, and management’s upbeat FY 2026 sales outlook, along with expansion in veterinary care, helped drive a sharp positive reaction in the stock despite the earnings miss.

Market Events for Tomorrow (ET)

8:30am:

• Unemployment Claims

10:30am:

• Natural Gas Storage

4:00pm:

• FOMC Member Cook Speaks

6:30pm:

• FOMC Member Miran Speaks

7:00pm:

• FOMC Member Jefferson Speaks

7:10pm:

• FOMC Member Barr Speaks

Notable Earnings for Tomorrow

• A.M: DOO, CMC, DBI, LOVE, PONY

P.M: N/A

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