Palantir Earnings Spark AI Relief Rally as Risk Flows Spill Into Global Equities

If you’re looking for a market that refuses to obey the laws of gravity, look no further than the AI sector’s latest Houdini act. Palantir’s earnings beat didn’t just goose its own stock price, it lit a fire under risk assets from New York to Mumbai, triggering a relief rally that left macro bears scratching their heads and short sellers scrambling for cover. The real story isn’t just about one company’s numbers. It’s about the market’s insatiable appetite for anything with an AI ticker, and the way that sentiment is bleeding into global equities, even as metals and commodities get bludgeoned.

Let’s get to the facts. Palantir posted quarterly results that beat even the most optimistic whisper numbers, sending its stock up double digits in after-hours trading, according to Investors.com. That move was enough to snap a two-week funk in the broader AI complex, which had been reeling from a combination of profit-taking and macro jitters. The Dow Jones and other major indices caught a bid, with the S&P 500 closing higher as traders rotated back into growth and tech. Meanwhile, gold and silver continued their selloff, as the risk-on mood sucked capital out of safe havens and into anything with an AI narrative.

But this isn’t just a one-day pop. The AI sector has become the market’s favorite volatility engine, with Palantir, Nvidia, and their ilk acting as both sentiment barometers and liquidity magnets. When AI stocks rally, everything else gets dragged along for the ride, at least until the music stops. The latest move comes against a backdrop of relentless macro noise: Australia hiking rates, the Fed under criminal investigation (yes, really), and commodities in freefall. Yet, the market’s message is clear: as long as AI delivers, risk appetite is alive and well.

Context matters. The last time we saw an AI-led rally of this magnitude, it was Nvidia’s earnings in mid-2025, which kicked off a three-month melt-up in tech stocks and pushed the S&P 500 to fresh highs. This time, the setup is eerily similar. Macro risks are everywhere, but the market is choosing to ignore them, at least for now. Cross-asset flows show money pouring out of precious metals and into equities, with gold down 7% in January and silver off a staggering 12%. Meanwhile, AI ETFs have seen inflows of $1.8 billion over the last week, according to Bloomberg data.

What’s driving this? Part of it is pure FOMO. The AI narrative has become self-reinforcing, with every earnings beat fueling more inflows and higher valuations. But there’s also a structural element: as long as rates stay contained and growth doesn’t implode, investors are happy to chase the next big thing. The problem, of course, is that this kind of sentiment is fragile. One earnings miss, one macro shock, and the whole edifice could come crashing down.

The technicals tell their own story. AI bellwethers like Palantir and Nvidia are now trading at nosebleed valuations, with forward P/Es north of 60. The S&P 500 is flirting with resistance at 6,980, while the Nasdaq is back within spitting distance of its all-time high. Momentum indicators are flashing overbought, with RSI readings above 70 across the board. Yet, the options market is still pricing in more upside, with call volumes outpacing puts by 2:1 in the AI sector. This is classic late-cycle behavior: everyone knows it’s crowded, but no one wants to be the first to leave the party.

Strykr Watch

For traders, the levels are clear. The S&P 500 is testing resistance at 6,980, with support at 6,900. A clean break above 6,980 opens the door to 7,050, while a failure sets up a quick trip back to 6,850. In the AI sector, Palantir’s post-earnings gap puts the stock at $34.20, just shy of its 52-week high. Watch for a retest of $35.00 as the next upside target, with downside support at $31.50. Nvidia, the sector’s bellwether, is holding above $310, with $325 as the next resistance.

Momentum is strong, but so is complacency. The VIX has dropped to 13, its lowest level since late 2021, even as realized volatility in tech remains elevated. This is a market that wants to go higher, but is one headline away from a sharp correction. Keep an eye on sector rotation: if money starts flowing out of AI and back into defensives, the rally could unravel fast.

The risks are obvious. Another metals rout could trigger margin calls and force cross-asset deleveraging. A hawkish surprise from the Fed, or a geopolitical shock, could pull the rug out from under risk assets. And let’s not forget the criminal probe hanging over the Fed, a wild card that could inject fresh volatility at any moment. The AI sector’s valuations leave no room for error. One earnings miss, and the unwind could be brutal.

Opportunities abound for the nimble. Long S&P 500 on a break above 6,980, with a stop at 6,900 and a target at 7,050. In the AI space, buy Palantir on dips to $32.00, with a stop at $31.00 and a target at $36.00. For the contrarians, short AI ETFs if the sector fails to hold recent gains, with tight stops above the highs. And don’t ignore the metals: if the selloff gets overdone, a tactical long in gold or silver could pay off on a mean reversion bounce.

Strykr Take

The AI sector just proved, once again, that it’s the market’s ultimate sentiment engine. As long as the narrative holds, risk appetite will keep driving equities higher. But this is a rally built on hope and momentum, not fundamentals. When the turn comes, it will be fast and unforgiving. Trade the trend, but keep your stops tight. The only thing more dangerous than missing the rally is overstaying your welcome.