Nasdaq led Wall Street higher on Thursday as Nvidia's latest results reassured investors that demand for artificial intelligence infrastructure remains strong, helping ease some concerns over whether the technology rally can sustain its momentum, Reuters reported.
By 9:42 a.m. ET, the Nasdaq Composite was up 0.83% at 26,342.87. The S&P 500 gained 0.35% to 7,702.44, while the Dow Jones Industrial Average rose 0.08% to 53,499.60.
Nvidia shares jumped 7.3% after the chipmaker delivered a strong forecast, pointing to continued demand for AI computing. The company did flag shortages of memory components as a potential constraint on the industry's growth, but the outlook was strong enough to satisfy investors facing increasingly high expectations for the AI trade.
The results reinforced the view that the companies driving the AI buildout are still capable of delivering the growth needed to support elevated valuations.
"The market rewarded the demand outlook. Nvidia has made quarterly beats routine," said Matthew Tuttle, CEO of Tuttle Capital Management.
But "a company can beat the quarter, raise the outlook, and still leave investors asking harder questions than the ones it just answered," he said.
Nvidia was not the only technology stock drawing attention. Salesforce jumped 14.4% after raising its annual revenue and profit forecasts and introducing a new plug-in integrated with Anthropic's Claude AI models. CrowdStrike gained 14.5% after lifting its annual revenue forecast and beating estimates for second-quarter earnings.
The gains in software stocks were significant because they offered investors some reassurance that advances in AI may not necessarily translate into a broad disruption of the established software industry. That helped revive interest in software shares that had lagged the semiconductor sector, which has been viewed as the clearest beneficiary of the AI investment cycle.
ServiceNow rose 5%, while Palo Alto Networks gained 8.5%. Micron Technology and Marvell Technology also advanced about 1% each.
The broader market was more mixed. Moderna fell 4.6% after announcing a $2 billion convertible bond sale, while HP dropped 9% after weaker PC shipments and margins weighed on its third-quarter performance. Dollar General declined 3.3% after maintaining its annual sales forecast.
Focus shifts to the Fed
With Nvidia's results now out of the way, investors are turning their attention back to monetary policy, particularly Federal Reserve Chair Kevin Warsh's first Jackson Hole address on Friday, Reuters reported.
Investors are looking for greater clarity on how the Fed will respond to inflation and whether Warsh remains firmly committed to the central bank's 2% inflation target. The latest Personal Consumption Expenditures data came in slightly hotter than expected on Wednesday, complicating the rate outlook.
Kansas City Fed President Jeffrey Schmid said current interest rates were not restrictive and that he favored rate hikes to bring inflation closer to the Fed's target.
Meanwhile, the number of Americans filing for unemployment benefits fell to 203,000 in the week ended August 22, below 208,000 expected by economists polled by Reuters, data showed on Thursday.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
