Stan Choe
Nvidia is helping to lead a split US stock market higher on Wednesday, ahead of the chip companyโs highly anticipated profit report coming after trading ends for the day.
The S&P 500 rose 0.7 per cent and recovered its losses from earlier in the week, when stocks swung sharply as investors tried to separate potential losers from winners in the artificial-intelligence boom.
The Dow Jones Industrial Average was up 210 points, or 0.4 per cent and the Nasdaq composite was 1.1 per cent higher. The Australian sharemarket is set to climb, with futures at 4.44am AEDT pointing to a rise of 64 points, or 0.7 per cent, at the open. The ASX jumped 1.2 per cent higher on Wednesday. Qantas results are the light of the local reporting season. The Australian dollar was trading at US71.18ยข at 4.59am AEDT.
Nvidia was the strongest single force lifting Wall Street, and it climbed 2.2 per cent even as more stocks fell within the S&P 500 than rose. Analysts are expecting it to deliver another blowout earnings report, and theyโre forecasting Nvidia will say its profit surged nearly 70 per cent from a year earlier to $US37.52 billion. That would mean it made more than $US400 million per day during the three months through January 25.
Nvidiaโs profit reports have become a bellwether for the market, not only because itโs become Wall Streetโs biggest stock but also because of how influential AI has become over the marketโs moves. In past years, the AI frenzy helped stocks run to record after record amid hopes that it would revolutionise the economy and make it more productive.
More recently, though, concerns have climbed about whether companies like Alphabet and Amazon are spending so much on chips from Nvidia and other equipment that theyโll never be able to make back the investments through future gains in productivity. If that leads to a pullback in spending, it would hit Nvidia directly.
Investors have also begun focusing on companies and industries that could get undercut by AI-powered competitors. That has led to sudden and swift sell-offs for stocks seen as potentially under threat, and the worries have rolled through industries as seemingly disparate as software, trucking logistics and legal services.
Thatโs lying on top of other worries already weighing on the market, including new tariffs announced by President Donald Trump to replace ones struck down by the Supreme Court.
โWhile those concerns are real, we believe investors would be wise to balance them out with offsetting trends that may be underappreciated in the current wall of worry headline cycle,โ according to Darrell Cronk, chief investment officer for Wealth & Investment Management at Wells Fargo.
Among them is the strong growth in profit that US companies have been reporting so far for the end of 2025. That has helped strengthen some corners of the US stock market that had been overshadowed by AI mania and Big Tech, including stocks of smaller companies.
Cava Group, the fast-casual Mediterranean restaurant chain, jumped 23.9 per cent after delivering better profit and revenue for the latest quarter than analysts expected. Its revenue for a fiscal year also topped $US1 billion ($1.4 billion) for the first time, up 22.5 per cent from the year earlier.
Axon Enterprise leaped 21.5 per cent after the seller of Tasers and body cameras with AI voice-activated assistants likewise reported bigger profit and revenue than analysts expected.
They helped offset a 13.7 per cent drop for First Solar, which reported a weaker profit than analysts expected.
Loweโs fell 4.5 per cent and was one of the heaviest weights on the market even though the home-improvement retailer reported a higher profit than analysts expected. Investors focused instead on its forecast for profit over the course of 2026, which fell short of analystsโ estimates.
CEO Marvin Ellison said the broad housing market remains pressured, and stocks for rival Home Depot and homebuilders also fell.
In stock markets abroad, indexes rose across much of Europe and Asia.
Japanโs Nikkei 225 climbed 2.2 per cent, and South Koreaโs Kospi gained 1.9 per cent for two of the bigger moves.
In the bond market, the yield on the 10-year Treasury held at 4.04 per cent, where it was late Tuesday.
AP
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