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Tech Stocks Lead Wall Street Higher 02/25 15:37
U.S. stocks rose Wednesday and erased their losses for the week so far, as
Nvidia and other technology companies led the way.
NEW YORK (AP) -- U.S. stocks rose Wednesday and erased their losses for the
week so far, as Nvidia and other technology companies led the way.
The S&P 500 added 0.8% for a second straight gain following Monday's swoon,
when stocks dropped as investors tried to separate potential losers from
winners in the artificial-intelligence boom.
The Dow Jones Industrial Average rose 307 points, or 0.6%, and the Nasdaq
composite climbed 1.3%.
Nvidia was one of the strongest forces lifting the market and rose 1.4%
ahead of its highly anticipated profit report, which was scheduled to arrive
shortly after trading ended for the day. Because Nvidia has grown to become the
U.S. market's largest stock by value, it has more influence on the S&P 500 than
any other company.
Nvidia's profit reports have become a bellwether for the market, not only
because it's so big but also because of how influential the AI boom has broadly
become over the market's moves. In past years, the AI frenzy helped stocks run
to record after record amid hopes that it would revolutionize the economy and
make it more productive.
More recently, though, concerns have climbed about whether companies like
Alphabet and Amazon are spending so much on chips from Nvidia and other
equipment that they'll never be able to make back the investments through
future gains in productivity. If that leads to a pullback in spending, it would
hit Nvidia directly.
Investors have also begun focusing on companies and industries that could
get undercut by AI-powered competitors. That has led to sudden and swift
selloffs for stocks seen as potentially under threat, and spasms have rolled
through industries as seemingly disparate as software, trucking logistics and
legal services.
That's on top of other worries already weighing on the market, including new
tariffs announced by President Donald Trump to replace ones struck down by the
Supreme Court.
"While those concerns are real, we believe investors would be wise to
balance them out with offsetting trends that may be underappreciated in the
current wall of worry headline cycle," according to Darrell Cronk, chief
investment officer for Wealth & Investment Management at Wells Fargo.
Among them is the solid growth in profit that U.S. companies have been
reporting so far for the end of 2025. That has helped strengthen corners of the
U.S. stock market that had earlier been overshadowed by AI mania and Big Tech,
including stocks of smaller companies.
Cava Group, the fast-casual Mediterranean restaurant chain, jumped 26.4%
after delivering better profit and revenue for the latest quarter than analysts
expected. Its revenue for a fiscal year also topped $1 billion for the first
time, up 22.5% from the year earlier.
Axon Enterprise leaped 17.6% after the seller of Tasers and body cameras
with AI voice-activated assistants likewise reported bigger profit and revenue
than analysts expected.
They helped offset a 13.6% drop for First Solar, which reported a weaker
profit than analysts expected.
Lowe's fell 5.6% and was one of the heaviest weights on the market even
though the home-improvement retailer reported a bigger profit than analysts
expected. Investors focused instead on its forecast for profit over the course
of 2026, which fell short of analysts' estimates.
CEO Marvin Ellison said the broad housing market remains pressured, and
stocks for rival Home Depot and homebuilders also fell.
All told, the S&P 500 rose 56.06 points to 6,946.13. The Dow Jones
Industrial Average gained 307.65 to 49,482.15, and the Nasdaq composite climbed
288.40 to 23,152.08.
In stock markets abroad, indexes rose across much of Europe and Asia.
Japan's Nikkei 225 climbed 2.2%, and South Korea's Kospi gained 1.9% for two
of the bigger moves.
In the bond market, the yield on the 10-year Treasury rose to 4.05% from
4.04% late Tuesday.
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