US Stocks Edge Higher Before Nvidia Earnings/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks moved modestly higher Wednesday as investors awaited earnings from chip giant Nvidia. Markets steadied after recent volatility tied to artificial intelligence spending concerns. Strong corporate profits and gains in select sectors helped offset pockets of weakness.
US Stocks Rise Ahead of Nvidia Earnings + Quick Looks
- S&P 500 up 0.5% in early trading.
- Dow Jones gains 159 points; Nasdaq climbs 0.7%.
- Nvidia expected to report nearly 70% profit growth.
- AI spending concerns linger across markets.
- Cava and Axon surge on strong earnings.
- First Solar slides on weaker results.
- Treasury yield ticks up to 4.05%.
Deep Look: US Stocks Edge Higher Before Nvidia Earnings
U.S. stocks drifted higher Wednesday morning as investors positioned themselves for what many consider the most consequential earnings report of the season: results from semiconductor heavyweight Nvidia.
By 9:35 a.m. Eastern, the S&P 500 had gained 0.5%, signaling calmer trading after sharp swings earlier in the week. The Dow Jones Industrial Average rose 159 points, or 0.3%, while the tech-heavy Nasdaq Composite climbed 0.7%.
Nvidia in the Spotlight
All eyes are on Nvidia, whose advanced chips sit at the center of the artificial intelligence boom. As the most valuable publicly traded company in the United States, Nvidia’s performance carries outsized influence over the broader market.
Wall Street analysts expect another standout quarter. Projections call for profit to surge nearly 70% year over year to approximately $37.5 billion for the three-month period ending Jan. 25. That would translate to more than $400 million in daily profit.
Nvidia’s earnings have increasingly become a bellwether for investor sentiment. Over the past two years, enthusiasm for AI helped propel major indexes to repeated record highs on expectations that the technology would drive productivity gains and corporate profitability.
AI Optimism Meets Spending Concerns
More recently, however, the AI narrative has grown more complicated. Investors are questioning whether tech giants such as Alphabet Inc. and Amazon are investing so heavily in Nvidia’s chips and AI infrastructure that returns may take years to materialize.
If companies scale back spending on AI hardware, Nvidia could feel the impact directly. At the same time, markets are rotating toward industries that may benefit from AI — while punishing those perceived as vulnerable to automation. That dynamic has triggered swift sell-offs in sectors ranging from software and logistics to legal services.
Darrell Cronk, chief investment officer for Wealth & Investment Management at Wells Fargo, said investors should balance AI-related concerns with broader positive trends.
“While those concerns are real, we believe investors would be wise to balance them out with offsetting trends that may be underappreciated,” Cronk noted, pointing to steady corporate profit growth.
Earnings Winners and Losers
Outside of Nvidia anticipation, several companies posted sharp moves based on their latest results.
Cava Group, the fast-casual Mediterranean chain, soared 18.6% after reporting stronger-than-expected quarterly profit and revenue. The company also surpassed $1 billion in annual revenue for the first time, marking 22.5% growth from the previous year.
Meanwhile, Axon Enterprise, known for its Tasers and AI-enabled body cameras, jumped 16.5% after exceeding analysts’ expectations for both earnings and revenue.
On the downside, First Solar fell 14.2% after posting weaker-than-expected profits, weighing on parts of the renewable energy sector.
The rotation suggests investors are rewarding companies delivering tangible earnings growth while remaining cautious about high valuations and uncertain AI returns.
Global Markets and Bonds
Markets overseas were broadly positive. Japan’s Nikkei 225 surged 2.2%, while South Korea’s Kospi gained 1.9%, reflecting global optimism ahead of Nvidia’s report.
In the bond market, the yield on the 10-year U.S. Treasury edged up to 4.05% from 4.04% late Tuesday — a modest move suggesting relatively stable expectations for interest rates and economic growth.
What’s Next
With Nvidia’s earnings due after the closing bell, volatility could quickly return. Given the company’s size and its symbolic role in the AI revolution, even a small surprise — positive or negative — could ripple through the broader market.
For now, investors appear cautiously optimistic. But whether AI enthusiasm remains the market’s driving force may depend largely on what Nvidia reveals about demand, spending trends and forward guidance in the hours ahead.
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