Stocks ended higher on Wednesday as Wall Street awaited the latest quarterly figures from Nvidia, the high-flying chipmaker that’s been bolstered by the artificial intelligence craze on Wall Street. A decline in yields also buoyed sentiment among investors.
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The Dow Jones Industrial Average closed 184.15 points higher, or 0.5% at 34,472.98. The S&P 500 gained 1.1% to end the day at 4,436.01, its best daily performance since June 30. The tech-heavy Nasdaq Composite climbed 1.6% to 13,721.03, making for three straight days of gains.
Nvidia is slated to report second-quarter earnings after the bell. Analysts polled by Refinitiv expect the company to report sharp year-over-year spikes in profit and revenue. Nvidia is the best-performing S&P 500 stock of 2023, up more than 200%, as investors cheer the company’s AI-related prospects.
Investors will look to the report for signs that the AI trend has more momentum. If not, it’s possible the August downturn will be prolonged. Shares closed 3% higher ahead of the release.
“I think almost nothing matters right now to market direction over the short term outside of these Nvidia earnings because, obviously, the whole narrative with weakening manufacturing and still a somewhat puzzlingly strong consumer doesn’t necessarily jive with market direction at the moment because multiples have expanded,” said Todd Jones, chief investment officer at Gratus Capital.
Although Nvidia is the largest position in the firm’s equity strategy, Jones said he is trimming back on other technology holdings, saying that “the valuation tells you there’s not a lot of room for margin for error.”