S&P 500, Nasdaq hit two-week highs heading into Nvidia earnings

By Shashwat Chauhan and Ragini Mathur

Feb 25 (Reuters) – The S&P 500 and the Nasdaq hit two-week highs on Wednesday, boosted by heavyweight technology stocks, ahead of Nvidia’s quarterly results that could reinforce or challenge a recent rebound in the sector.

Nvidia gained 2.2% ahead of earnings, due after markets close on Wednesday. AI investors will be looking out for evidence that the chipmaker’s profits are growing on the back of Big Tech’s $630 billion capital spending budget for 2026.

Nvidia options imply a move of about 5.6% in either direction a day after the company reports results, which is the lowest expected post-results swing ahead of any quarterly report in at least three years.

Chip stocks were broadly mixed, and the Philadelphia SE Semiconductor Index climbed 1.4% to a record high.

“The focus on AI will continue into Nvidia’s earnings announcement … overall, the lack of new news helped to stabilize markets globally,” said Bob Savage, head of markets macro strategy at BNY.

At 11:44 a.m. ET, the Dow Jones Industrial Average rose 212.40 points, or 0.43%, to 49,385.92, the S&P 500 gained 46.01 points, or 0.67%, to 6,936.08 and the Nasdaq Composite gained 244.31 points, or 1.07%, to 23,107.99.

The S&P 500 information technology index rose 1.7%, while the communication services index added 0.7%. Financials also added 1.2%.

Technology stocks extended their gains from Tuesday, when the Nasdaq rose more than 1% as sentiment towards AI stocks improved.

U.S. President Donald Trump boasted of stock market advances in his State of the Union speech on Tuesday and said that “almost all” countries and corporations want to stick to tariff and investment agreements previously made with the United States.

Trump’s temporary global tariff of 10% came into effect on Tuesday after the Supreme Court last week voided most of the tariffs he had imposed last year, finding that the emergency law he relied on did not allow the imposition of tariffs.

He later said the levy would be 15%, but it was unclear when and if it would apply.

February has been a choppy month for U.S. equities as investors questioned if massive AI spending by technology giants was actually paying off.

Concerns of industry-wide disruptions with the rise of AI hit several sectors earlier this year, ranging from software, commercial real estate to trucking and logistics.

The S&P 500 software and services index climbed 2.3% on Wednesday, though still down more than 21% for the year. Earnings from software firms Salesforce and Snowflake are due after close on Wednesday.

Among others, Axon Enterprise climbed 21.4% after the taser-maker beat fourth-quarter profit estimates, while Workday dropped 0.7% after the enterprise software maker forecast fiscal 2027 subscription revenue below estimates.

Lowe’s Companies fell 4.5% as the home improvement retailer forecast annual sales and profit below estimates, while GoDaddy tumbled 15.9% after the internet services provider forecast annual revenue below Wall Street expectations.

Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE and by a 1.76-to-1 ratio on the Nasdaq.

The S&P 500 posted 43 new 52-week highs and 9 new lows, while the Nasdaq Composite recorded 102 new highs and 77 new lows.

(Reporting by Shashwat Chauhan and Ragini Mathur in Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli)