US Stocks Recover from Losses on Wednesday, Inspired by Nvidia Jump, Despite Alphabet and AMD Disappoints
Following initial declines, US stocks staged a recovery on Wednesday, led by gains in tech stocks. The tech-heavy Nasdaq Composite (^IXIC) rose 0.2%, while the S&P 500 (^GSPC) added 0.4%. The Dow Jones Industrial Average (^DJI) led the advance, rising 0.7%, or over 300 points.
Despite disappointing earnings from Alphabet (GOOG, GOOGL) and AMD (AMD), the tech sector found some respite in a surge in Nvidia (NVDA) shares. Shares of Nvidia jumped over 5%, helping to lift the broader market.
Alphabet's stock faced pressure, dropping nearly 7%, as its fourth-quarter cloud revenue fell short of expectations. This raised concerns among investors about the company's hefty spending on artificial intelligence (AI) and its impact on profitability.
On the other hand, Nvidia emerged as a potential beneficiary from Alphabet's AI investments. Its shares helped drive the major indexes' rally back from the red.
Meanwhile, the 10-year Treasury yield (^TNX) fell nine basis points to hit 4.42%, its lowest level since December 2024, further benefiting interest-rate-sensitive sectors.
AMD's earnings also weighed on the market. While the chipmaker posted a quarterly revenue beat, a disappointing data center sales forecast raised worries about the momentum of the AI sector. AMD shares tumbled over 6%.
The market remains cautious, however, amid heightened tensions between the US and China over tariffs. Apple (AAPL) shares initially dropped by about 2% before recovering following reports of a potential antitrust probe into its App Store by China.
Additionally, President Donald Trump's unexpected suggestion that the US could acquire and develop the Gaza strip as a "Riviera of the Middle East" left investors perplexed about the future direction of trade policy.