U.S. stocks opened higher on Wednesday evening, Beijing time. Supported by gains in NVIDIA and Oracle shares, major indices extended their advances from the previous trading session. The market is focused on upcoming earnings reports from companies such as NVIDIA, Salesforce, and Snowflake.
The Dow Jones Industrial Average rose 174.47 points, or 0.35%, to 49,348.97. The Nasdaq Composite gained 155.96 points, or 0.68%, to 23,019.65. The S&P 500 increased by 29.05 points, or 0.42%, to 6,919.12.
NVIDIA, Salesforce, and Snowflake are scheduled to report their financial results after the market closes on Wednesday. Investors are currently reassessing the elevated valuations of technology stocks and expressing doubts about the substantial artificial intelligence capital expenditures by hyperscale companies.
NVIDIA has underperformed its peers in the chip sector in recent months, a trend that coincides with the Nasdaq 100 Index failing to reach new highs since late October and a rotation of funds away from technology stocks.
To revive its stock performance, NVIDIA needs to at least exceed its previous outlook and set new targets above Wall Street's current estimates. Although the company has repeatedly achieved this, concerns are growing about the sustainability of the AI spending wave.
Ulrike Hoffmann-Burchardi, Chief Investment Officer for Global Equity at UBS, stated in a report: "Whether market confidence can be sustained in the coming days partly depends on NVIDIA's results. Following recent announcements by hyperscale companies of further increases in capital expenditures, the market expects the chipmaker to provide revenue guidance that exceeds expectations and show strong sales growth."
Another AI-related stock, Oracle, rose over 2%, continuing the rebound in software stocks. Oppenheimer upgraded its rating, citing a "favorable" risk-reward profile for the stock after its recent pullback.
The software sector continued its gains from the previous day, with the iShares Expanded Tech-Software Sector ETF (IGV) rising about 2%. The fund saw a slight increase in pre-market trading on Wednesday.
Stocks such as Palantir Technologies and Microsoft moved higher. However, Workday fell sharply by 9% after issuing weak revenue forecasts.
Major indices generally rose on Tuesday as concerns about AI disrupting multiple industries eased.
AMD helped lead the broader market higher after Meta Platforms announced a multi-year cooperation agreement with the company.
Anthropic introduced connectors and plugins for its knowledge worker tool, Claude Cowork, allowing businesses to integrate the AI tool with existing applications like Google Drive. This contributed to a rebound in software and cybersecurity stocks. In previous weeks, Claude Cowork had caused volatility in the software sector, with investors worried the tool could disrupt the businesses of existing software providers.
Additionally, investors are closely monitoring U.S.-Iran tensions this week. Over the weekend, former U.S. President Trump threatened to raise global tariffs to 15%, but ultimately imposed a 10% tariff on global imports on Tuesday.
U.S. Trade Representative Greer stated on Tuesday that Trump would sign a supplementary order to raise tariff levels to 15% where applicable. He said: "We are aiming for 10%, but we are also studying how to implement the President's proposed 15%, as we want to maintain consistency."
In his State of the Union address on Tuesday evening, Trump extensively discussed the economic situation, proposed government-supported retirement accounts for workers, and reiterated his call to ban large institutional investors from purchasing single-family homes.
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