The Dow Jones Industrial Average (DJIA) rose around 200 points, or 0.4%, taking a fresh run at the 49,400 region on Wednesday as equity markets traded cautiously bullish ahead of Nvidia (NVDA)'s highly anticipated fiscal fourth-quarter earnings report after the bell. The S&P 500 gained 0.54% to around 6,927, while the Nasdaq Composite added roughly 1%, led by continued strength in semiconductor and software names. All three major indexes built on Tuesday's rebound from Monday's sharp selloff, though volume and conviction were muted with traders reluctant to take big directional bets before the AI bellwether's results.
All eyes on Nvidia as AI spending cycle faces its biggest test
Nvidia (NVDA) was the undisputed focal point of the session, with the chipmaker set to report fiscal Q4 2026 results after the close. Wall Street consensus called for earnings per share of $1.53 on revenue of $65.7 billion, both representing roughly 68-72% year-over-year growth. The results are expected to provide the clearest read yet on demand for Nvidia's Blackwell architecture and the sustainability of the hyperscaler AI capital expenditure cycle, after Meta (META) (META), Alphabet (GOOGL) (GOOGL), and Amazon (AMZN) (AMZN) collectively guided to over $500 billion in 2026 capex. Nvidia shares drifted about 1% higher during the session as chip stocks broadly firmed, with Advanced Micro Devices (AMD) (AMD) extending Tuesday's 9% surge following its multiyear, 6-gigawatt GPU deal with Meta. Polymarket traders priced in a 94.5% probability of an earnings beat heading into the print.
Software rebounds as AI disruption panic fades
The software sector continued to claw back losses from Monday's brutal selloff, which saw the iShares Expanded Tech-Software Sector ETF (IGV) (IGV) drop nearly 5% on fears that AI-powered coding tools could undermine legacy business models. Salesforce (CRM) (CRM) added to Tuesday's 4.7% gain, while ServiceNow (NOW) (NOW) and cybersecurity names like Zscaler (ZS) (ZS) and CrowdStrike (CRWD) (CRWD) also pushed higher. International Business Machines (IBM) (IBM) rose 2.5%, leading Dow gainers and bouncing back from Monday's 13% plunge — its worst day since 2000 — which was triggered by Anthropic's Claude Code announcement. Jefferies (JEF) analyst Brent Thill said IBM's mainframe business is more resilient than the market gave it credit for. Microsoft (MSFT) (MSFT) gained 2.2%, with Cerity Partners' Jim Lebenthal noting the stock trades at an attractive low-20s multiple after sliding nearly 20% in 2026.
PayPal (PYPL) surges on Stripe acquisition reports
PayPal (PYPL) continued its torrid two-day rally, climbing a cumulative 13% after Bloomberg reported that privately held payments giant Stripe is weighing an acquisition of all or parts of the company. The report followed Monday's initial news that PayPal had attracted unsolicited takeover interest from multiple potential buyers, including banks. PayPal's market cap sat around $43 billion at Tuesday's close of $47.02, a fraction of Stripe's recently disclosed $159 billion private valuation. Both companies have declined to comment, and the discussions were described as preliminary with no certainty of a deal.
Trump SOTU keeps tariff outlook steady; Gold retreats
President Donald Trump delivered the longest State of the Union address in history on Tuesday night, but markets largely shrugged off the speech on Wednesday. Wolfe Research analyst Tobin Marcus noted the address was light on economic policy specifics, with Trump focused on portraying the economy in a positive light rather than signaling any escalation in trade policy. This was a relief for investors still digesting the Supreme Court's ruling last week that struck down Trump's sweeping IEEPA-based tariffs, and the subsequent executive order imposing a new 10% global levy. Gold pulled back, trading around $5,120 per ounce after retreating from recent record highs, as the risk-on tone and lack of fresh tariff escalation reduced safe-haven demand. On the monetary policy front, the CME (CME) FedWatch Tool showed a 96% probability that the Federal Reserve (Fed) will hold rates steady at the March 18 meeting, though Fed Governor Christopher Waller's comment earlier in the week that the March decision is a "coin flip" kept the door ajar for a surprise cut from the current 3.50-3.75% target range.
Dow Jones daily chart
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