Wall St rises on chips' strength ahead of Nvidia results

The tech-heavy Nasdaq led gains on Wall Street on Wednesday, lifted by a rebound in chip stocks ahead of Nvidia’s quarterly earnings, which investors view as a crucial test of AI demand.

Nvidia, the world’s most valuable company and the centerpiece of the global AI boom, rose 0.7%. The company’s results are expected after the closing bell.

Investors will crunch the numbers for signs that appetite for AI infrastructure remains strong enough to support lofty valuations across the technology and AI space.

“The expectation is that Nvidia’s earnings will be strong. It’s the extent to which they are stronger than what is currently baked into markets will be important,” said James McCann, senior economist at Edward Jones.

“The bar continues to rise for some of these companies. Can it continue to beat that bar? That’s going to be a critical aspect for investors.”

The broader chip sector also advanced on Wednesday. Marvell Technology rose 7.8%, Intel gained 6.3% and Micron Technology added 3.6%.

Wall St extends losses as chip stocks slide

The Philadelphia SE Semiconductor index advanced 2.9%.

At 9:51 a.m. ET, the Dow Jones Industrial Average rose 32.63 points, or 0.07%, to 49,396.51, the S&P 500 gained 18.25 points, or 0.25%, to 7,373.20 and the Nasdaq Composite gained 105.36 points, or 0.43%, to 25,981.68.

Eight of the 11 main S&P 500 sectors were in the green, with the tech sector leading gains with a 0.8% rise.

U.S. stocks have come under pressure in recent days as a selloff in global bond markets drove yields higher.

The benchmark 10-year Treasury yield, which touched a 16-month high of 4.687% in the previous session, eased to 4.651% on Wednesday.

Traders have ramped up bets the U.S. Federal Reserve could raise interest rates at the turn of the year as the conflict in the Middle East pushes oil prices higher, reviving inflation worries.

Brent crude futures slipped 3% to $108.82 a barrel after U.S. President Donald Trump again said the war with Iran would end “very quickly.” Still, investors remained cautious over the outcome of peace talks as disruptions to Middle Eastern supply continued.

Investors are also awaiting the minutes from the Fed’s latest meeting -scheduled to be released later in the day – for clues on policymakers’ thinking, as expectations for a rate hike continue to grow.

Markets are now pricing in a more than 40% chance of a 25-basis-point rate hike in December, according to CME’s FedWatch tool. Expectations for a 50-basis-point increase that month have risen to 13.7%, from 4.2% a week earlier.

Among other movers, Intuit declined 3.5%. Reuters, citing an internal memo, reported that the company is laying off about 3,000 employees.

TJX gained 5.4% after the off-price retailer raised its annual comparable sales and profit forecasts, banking on resilient demand at its stores.

Target shares fell 7.1% even after the retailer doubled its annual sales growth forecast, while Lowe’s declined 3.8% as the home improvement firm reaffirmed its full-year forecast.

Games and toy maker Hasbro fell 8.8% after the company reaffirmed its annual forecast.

Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE, and by a 1.61-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and 14 new lows while the Nasdaq Composite recorded 32 new highs and 104 new lows.