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NEW YORK: Wall Street’s main indexes rose on Wednesday, as shares of Nvidia jumped on hopes of another strong outlook from the chip designer which could reignite an artificial intelligence-powered rally in megacap growth stocks.

Rising bets that Nvidia’s revenue target will surpass Wall Street estimates pushed the chip designer’s stock to a record high on Tuesday. But analysts equally fear a wider selloff if the company fails to match investor expectations.

Shares of Nvidia were up 2.1%. The company is expected to report quarterly results after markets close on Wednesday.

A blowout forecast from the company last quarter has been one of the biggest catalysts for the S&P 500’s 15% gain so far this year.

“A lot of investors have the expectation that you don’t give that kind of guidance and commentary unless you’re pretty sure that you’re going to absolutely blow away the number on the following quarter,” said Matt Stucky, senior portfolio manager of Equities at Northwestern Mutual Wealth Management Company.

Shares of some other major growth stocks bounced back from declines in the first few weeks of August when signs of strength in the US economy had stoked worries that the Federal Reserve could keep interest rates higher for longer. Alphabet and Meta Platforms were up 2.8% and 3.1%, respectively, while Netflix climbed 5.4% after data showed signups in the United States remained elevated.

The moves lifted the S&P 500 communication services index up 2.3%.

Equities received a further boost as the yield on the 10-year US Treasury note pulled back from near 16-year highs after weak business activity data from the United States and the euro zone hinted at global disinflation.

The data came ahead of US Federal Reserve Chair Jerome Powell’s comments on Friday that will be parsed for more clues on the central bank’s interest rate path.

Traders’ bet of a rate hike pause by the Fed next month stood at 88.5%, according to CME Group’s FedWatch tool.

US stocks will eke out only marginal gains between now and the year end, according to strategists in a Reuters poll, with the S&P 500 forecast to end the year at 4,496, about 2.2% above Monday’s close.

At 11:38 a.m. ET, the Dow Jones Industrial Average was up 133.05 points, or 0.39%, at 34,421.88, the S&P 500 was up 38.58 points, or 0.88%, at 4,426.13, and the Nasdaq Composite was up 199.25 points, or 1.48%, at 13,705.12.

Sport retailers Nike and Under Armour fell 3.8% and 1.7%, respectively, after a downbeat profit forecast from Foot Locker, whose shares slumped 32.9%.

Shares of drugmakers Gilead Sciences and Merck & Co advanced 1.2% and 4.2%, respectively, after Swiss rival Roche inadvertently published positive lung cancer drug trial data.

Peloton Interactive shares plunged 22.5% to a record low after the fitness equipment maker pushed back its cash-flow positive target.

Advancing issues outnumbered decliners by a 3.28-to-1 ratio on the NYSE and by a 2.31-to-1 ratio on the Nasdaq.

The S&P index recorded 7 new 52-week highs and 10 new lows, while the Nasdaq recorded 35 new highs and 115 new lows.

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