Nvidia shares rose 2.5 per cent on Thursday as technology stocks led a broad Wall Street rebound, with the AI chipmaker among the companies helping the Nasdaq post its strongest one-day gain since 4 August. The Nasdaq Composite climbed 1.7 per cent, the S&P 500 gained 1.1 per cent and the Dow Jones Industrial Average added 0.6 per cent, or about 316 points. Both the Nasdaq and S&P 500 recorded their strongest daily gains since 4 August.
The technology sector gained about 2.2 per cent, while semiconductor stocks rose more than 3 per cent. Advanced Micro Devices rose 6.4 per cent and Intel gained 7.7 per cent, while all seven companies in the Magnificent Seven finished higher.
The rebound came a day after the Federal Reserve raised interest rates by 0.25 percentage points, taking its target range to 3.75 per cent to 4 per cent. It was the Fed's first rate increase since 2023 and initially pushed US shares lower. On Thursday, the 10-year Treasury yield fell below 5 per cent and Brent crude declined for a second consecutive session.
Nvidia Leads Technology Rebound
Nvidia closed at $219.34 (about £164) after its 2.5 per cent rise. The company supplies graphics processing units used in data centres running artificial intelligence systems, putting its shares at the centre of investor interest in AI infrastructure.
Other major technology companies also gained. Amazon rose about 2 per cent, while Alphabet, Apple, Meta, Microsoft and Tesla all advanced by at least 1.3 per cent.
The rebound followed several weaker sessions for US shares. The S&P 500 recorded its second rise in nine sessions on Thursday, highlighting the scale of the recovery despite continuing concerns over borrowing costs.
Treasury Yields Ease After Fed Rate Rise
The 10-year US Treasury yield fell to 4.946 per cent on Thursday from 5.003 per cent the previous day, according to Tradeweb. Yields had climbed above 5 per cent earlier in the week, adding pressure to shares as markets responded to higher borrowing costs.
Brent crude fell about 1 per cent to $104.82 (about £78) a barrel. Reuters reported that oil prices declined as concerns over supply disruption eased, while lower energy prices also reduced some pressure on bond yields.
The Federal Reserve's latest decision remains important for markets. Its benchmark rate is now at 3.75 per cent to 4 per cent, and 16 of the 18 policymakers who submitted rate projections expected at least one more increase before the end of 2026.
AI Spending Faces Earnings Test
The wider recovery extended beyond the largest technology companies. The Russell 2000 index of smaller US companies gained 0.6 per cent, while other economically sensitive shares also advanced.
Companies in the S&P 500 are expected to increase profits by about 32 per cent this year compared with 2025, according to FactSet figures cited in Thursday's market coverage.
For AI companies, investors continue to assess whether earnings generated by heavy spending on artificial intelligence will match the expectations attached to their share prices. Nvidia's results and outlook are central to that debate because of its role in supplying chips for AI data centres.
Thursday's advance reversed some of Wednesday's losses, but investors remain focused on interest rates, inflation and whether AI investment can deliver the earnings growth reflected in technology valuations.
