US stocks turned sharply higher at midday Tuesday, with the Dow climbing 170 points and the tech-heavy Nasdaq outpacing peers as Bitcoin surged 8% back above $91,000 and semiconductor stocks like Credo Technology soared on earnings beats.
The midday rally marked a dramatic reversal from a brutal opening, with markets briefly dipping into the red after Monday’s crypto carnage triggered a wave of risk-off selling.
The rebound underscored how tightly crypto sentiment and AI-sector momentum have become intertwined heading into December, a dynamic that can flip entire market regimes in hours.
Bitcoin kickstarts the comeback
Bitcoin’s resurrection, rallying as much as 8% to trade above $91,300 intraday, catalyzed the broader equity rebound.
Trading volume surged to $78 billion, marking one of the strongest sessions in weeks, as institutional flows accelerated into digital assets that just days earlier faced a systemic deleveraging crisis.
The 7% bounce erased roughly half the losses from Monday’s brutal $85,000 plunge and signaled that the “leverage unwind” selling was exhausted.
The move reverberated across crypto-linked equities.
Strategy Inc. (MSTR) shares climbed 6% from Monday’s lows, while Bitcoin trading volume patterns suggested major banks and wealth managers were deploying fresh capital into depressed digital assets.
Ether also rebounded sharply, gaining 8% to return above $3,000, while smaller tokens like Cardano and Chainlink surged by more than 10%.
Yet trading strategists cautioned that beneath the surface, sentiment remained fragile, whale inflows to exchanges and algorithmic triggers had helped power Monday’s collapse, and similar dynamics could repeat if markets stumble again.
AI & tech drive the rally
The bigger catalyst, however, was Credo Technology’s stellar earnings report.
The high-speed chip specialist: a key player in AI infrastructure for data centers, smashed analyst expectations with adjusted earnings of $0.67 per share versus consensus of $0.49, and posted $268 million in revenue, up a staggering 272% year-over-year.
The company raised guidance for Q3 revenue to $335–$345 million, nearly 40% above analyst consensus, sending shares surging 14–18% on the news and propelling the broader semiconductor cohort higher.
The Credo beat validated a thesis that had spooked markets all week: demand for AI infrastructure, especially training and inference clusters, remains robust despite December volatility and macro uncertainty.
Nvidia, the sector’s bellwether, edged higher by 1% after CEO Jensen Huang’s optimistic comments about China demand.
The broader semiconductor index tracked Credo’s strength, with investors rotating back into high-growth names they’d punished during the crypto deleveraging panic.
Midday action saw the Dow +170 points (+0.25%), S&P 500 +0.3%, and Nasdaq +0.6%, with tech and cryptocurrency-adjacent names leading the charge as risk appetite cautiously returned.
Gold and silver slumped on renewed confidence in equities, while Treasury yields edged higher on bets that a faster crypto recovery signals stabilizing risk sentiment ahead of the December 9-10 Fed decision.
The question for traders: does Tuesday’s rebound mark the start of a genuine recovery, or a false flag before year-end volatility hits again?
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