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NEW YORK (Reuters) – U.S. stocks were sharply higher in afternoon trading Wednesday, with the S&P 500 and Nasdaq up more than 1% each, as shares of Nvidia (NASDAQ:NVDA) gained ahead of quarterly results from the company whose chips are widely used for artificial intelligence (AI) computing.
Investors expect another strong outlook from Nvidia, which reports after the closing bell, could fuel a further rally in tech stocks.
Shares of Nvidia were up 2.6% in afternoon trading, adding to recent gains. The stock hit a record high on Tuesday.
Adding to Wall Street’s upbeat mood, the yield on the 10-year U.S. Treasury note eased from near 16-year highs after weak business activity data from the United States and the euro zone.
“What’s troubled this market has been the persistent rise in rates at the longer end,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
U.S. Federal Reserve Chair Jerome Powell’s comments on Friday at the Jackson Hole conference will be scrutinized for clues on the U.S. central bank’s interest rate path.
The Dow Jones Industrial Average rose 159.4 points, or 0.46%, to 34,448.23, the S&P 500 gained 46.69 points, or 1.06%, to 4,434.24 and the Nasdaq Composite added 218.65 points, or 1.62%, to 13,724.52.
Nvidia’s report and comments will be key to the broad market, Meckler said.
“Not just their numbers, but what they say in the conference call about what’s happening in AI is going to have a big impact on market sentiment,” he said.
Nvidia is part of the so-called Magnificent Seven group of megacap stocks including Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) that have powered the S&P 500’s sharp gains this year, and investors fear a selloff if the company fails to meet expectations.
Investors in a Reuters poll said they expected the S&P 500 to end the year at 4,496, about 2.2% above Monday’s close.
Shares of drugmakers Gilead Sciences (NASDAQ:GILD) and Merck & Co advanced after Swiss rival Roche inadvertently published positive lung cancer drug trial data.
Advancing issues outnumbered declining ones on the NYSE by a 3.62-to-1 ratio; on Nasdaq, a 2.17-to-1 ratio favored advancers.
