U.S. stocks traded higher on Wednesday as investors awaited Nvidia’s highly anticipated earnings report, widely viewed as a crucial test for the AI-driven rally that has defined markets over the past year. The Nasdaq Composite led gains, climbing roughly 0.8%, while the S&P 500 added about 0.5% and the Dow Jones Industrial Average rose near 0.3%.
The advance followed a volatile stretch marked by sharp rotations in and out of technology shares. After weeks of “AI scare trade” selling and heightened scrutiny of valuations, traders appeared willing to step back into select growth names as they await signals from Nvidia and other major tech bellwethers reporting after the close.
Market Movers:
- Circle Internet (CRCL) +20% – Shares surged after fourth-quarter results topped expectations, driven by strong growth in USDC circulation, which climbed sharply year over year. Management issued upbeat 2026 guidance, forecasting expanding margins and continued double-digit supply growth as it invests aggressively for scale.
- CAVA Group (CAVA) +18% – The restaurant chain rallied after beating estimates and outlining solid full-year guidance. Investors cheered continued same-store sales growth, expanding margins, and disciplined unit expansion that reinforced confidence in its long-term growth story.
- Axon Enterprise (AXON) +16% – Shares jumped after the company delivered a strong earnings beat and projected revenue growth approaching 30% in 2026. Management highlighted surging demand for AI-enabled public safety products and raised long-term revenue targets, underscoring durable federal and municipal spending trends.
- First Solar (FSLR) -13% – The stock tumbled following a wide earnings miss and a weaker-than-expected 2026 outlook. Management cited permitting delays, tariff-related uncertainty, and strategic factory underutilization as headwinds likely to weigh on near-term results.
- MercadoLibre (MELI) -8% – Shares fell despite robust revenue growth as profit came in below expectations. Higher provisions and stepped-up investment spending pressured margins, prompting analysts to trim price targets.
- Intuitive Machines (INTU) -7% – The company declined after announcing a sizable equity raise to fund satellite and space infrastructure expansion. While the capital supports long-term growth initiatives, dilution concerns weighed on the stock.
- Workday (WDAY) -5% – Shares slipped after issuing slightly softer subscription revenue guidance for the coming quarter and fiscal year. Though results beat in the latest period, forward-looking commentary failed to reassure investors amid heightened scrutiny of software demand.
- HP (HPQ) -2% – The PC maker edged lower after mixed guidance overshadowed a quarterly beat. Investors focused on cautious free cash flow expectations and a midpoint outlook that trailed consensus estimates.
Nvidia in Focus
Nvidia’s earnings after the bell are seen as a referendum on the AI trade. Options markets are pricing in a notable swing in either direction, reflecting the stock’s outsized influence on broader tech sentiment. Historical data suggests patience may favor long-term holders, but near-term volatility remains elevated. With hyperscalers continuing heavy AI capital spending, investors are looking for confirmation that demand for high-performance chips remains strong and margins resilient.
Policy and Trade Uncertainty Lingers
Markets also continued digesting President Trump’s recent State of the Union address, delivered against the backdrop of ongoing tariff maneuvering. Administration officials reiterated plans to maintain elevated levies on Chinese imports and signaled potential adjustments to the temporary global tariff rate introduced after the Supreme Court’s recent ruling. Trade policy uncertainty, combined with shifting AI narratives, has contributed to rising dispersion across individual stocks — a dynamic some strategists warn makes the broader market more fragile.
Looking Ahead
All eyes now turn to Nvidia’s results and commentary on AI infrastructure demand, which could either reignite enthusiasm or deepen skepticism around tech valuations. Beyond earnings, investors will continue monitoring tariff developments, labor market data, and Federal Reserve signals for clues on the broader macro trajectory. With market leadership narrowing and volatility elevated, the AI trade’s next chapter may hinge less on hype — and more on hard numbers.