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US equities recovered on Wednesday, with the tech-heavy NASDAQ leading gains as investors prepared for NVIDIA’s quarterly earnings report.
Chip stocks rebounded, supported by optimism over continued demand for AI infrastructure, while the broader market stabilized following recent pressure from rising bond yields and fluctuating oil prices.
The NASDAQ Composite rose 0.43% to 25,981.68, outperforming the Dow Jones Industrial Average which gained 0.07% to 49,396.51 and the S&P 500, which climbed 0.25% to 7,373.20.
Technology shares drove the market higher, with NVIDIA (NVDA.O) up 0.7% ahead of its earnings release. Marvell Technology advanced 7.8%, Intel rose 6.3%, and Micron Technology added 3.6%. The Philadelphia Semiconductor Index increased 2.9%, reflecting sector-wide strength.
James McCann, Senior Economist at Edward Jones, said, "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." He added, "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."
Retail stocks showed varied performance as companies released earnings and guidance. TJX (TJX.N), the parent of TJ Maxx and Marshalls, rose 5.4% after raising its annual comparable sales and profit forecasts.
The company reported stronger-than-expected revenue and profit for the latest quarter, with CEO Ernie Herrman noting a positive start to the current quarter.
Target (TGT.N) fell 7.1% despite doubling its annual sales growth forecast, while Lowe's (LOW.N) declined 3.8% after reaffirming its full-year guidance. Hasbro (HAS.O) dropped 8.8% following the reaffirmation of its annual forecast. These mixed results reflected cautious investor sentiment despite some stronger-than-expected retail performance.
US Treasury yields eased slightly after recent volatility. The 10-year Treasury yield fell to 4.651%, down from a 16-month high of 4.687%, while the 30-year yield declined more than one basis point.
Lower yields helped reduce pressure on stock valuations, which had been affected by concerns over rising interest rates amid global tensions and elevated energy costs.
Oil prices also retreated, with Brent crude down 4.3% to $106.49 per barrel and West Texas Intermediate futures falling 3% to around $100 per barrel. Investors monitored developments in the Middle East, including statements from US leadership suggesting a rapid end to conflicts, which contributed to easing supply concerns.
NVIDIA’s post-market earnings are a focal point for investors assessing AI sector momentum. Shares rose 1% in pre-market trading, reflecting expectations of continued growth in orders and revenue.
Analysts note that NVIDIA stock has contributed significantly to S&P 500 returns this year, and its guidance is likely to influence the technology and AI sector broadly.
Ben Snider, Chief US Equity Strategist at Goldman Sachs, stated, "The chipmaker and AI darling has contributed about 20% of the S&P 500’s returns this year and almost that much of the broad market index’s earnings growth in 2026. The numbers they report matter." Other AI-related stocks also performed strongly, with Advanced Micro Devices up 7.4% and Intel gaining 8.4%.
Advancing stocks outnumbered decliners by 1.68-to-1 on the NYSE and 1.61-to-1 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.
European markets rose following mixed performance in Asia, with Tokyo’s Nikkei 225 down 1.2% as Japanese government bond yields remained near historic highs.
Investors await the Federal Reserve’s meeting minutes later in the day, which could provide insight into interest rate expectations amid persistent inflation concerns and geopolitical developments.
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