The stock market roared back to life on Wednesday, snapping a four-day losing streak as investors braced for a pivotal earnings report from Nvidia, the undisputed king of the artificial intelligence (AI) revolution. The S&P 500 climbed 0.8%, the Nasdaq Composite surged 1.2%, and the Dow Jones Industrial Average added 228 points, or 0.5%, as Wall Street held its breath ahead of what could be the most consequential earnings release of the year.
Nvidia, whose meteoric rise in 2024 made it the poster child of the AI boom, saw its shares jump 4% ahead of its fourth-quarter results. The chipmaker’s performance is seen as a litmus test for the broader market, particularly the tech sector, which has been under pressure amid concerns over lofty valuations and the sustainability of the AI-driven rally.
“Nvidia is the bellwether and market-darling stock that is of vital importance to the broader markets,” said Chris Brigati, chief investment officer at SWBC. “Its performance provides meaningful guidance for the broader market tone. The importance for the tech sector cannot be understated.”
The Nvidia Effect: A Make-or-Break Moment for Tech
Nvidia’s earnings come at a critical juncture for the tech-heavy Nasdaq, which has struggled to regain its footing after a sharp selloff earlier this month. The chipmaker’s results are expected to shed light on the health of the AI infrastructure build-out, a key driver of growth for the sector.
Analysts are closely watching for signs of how Nvidia is navigating the transition from its older Hopper chip design to the new Blackwell architecture. Some fear that customers may delay purchases until the new products become more widely available, potentially creating a short-term headwind for the company.
“Despite recent concerns about cost-efficient AI alternatives, major clients’ reaffirmed spending plans—such as Meta, Alphabet, and Amazon—and Nvidia’s dominance in AI chips suggest resilience,” said Kenny Polcari, chief market strategist at SlateStone Wealth. “The report will likely clarify whether the Blackwell launch and sustained hyperscaler demand can propel Nvidia past short-term market noise.”
Nvidia’s stock has been in a consolidation phase this year, down 2% after a staggering 170% rally in 2024. However, any major news from the earnings report or CEO Jensen Huang’s keynote at the company’s annual GPU Technology Conference in March could reignite investor enthusiasm.
“Nvidia’s stock is in a consolidation, which could take 6-12 months, though any major news with Nvidia could change that,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.
Broadening Gains Beyond the Magnificent Seven
While Nvidia’s earnings dominated headlines, there were signs that the market rally is beginning to broaden beyond the so-called Magnificent Seven—Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla. The Russell 2000 Index, which tracks small-cap stocks, surged 1.2%, outperforming the broader market.
“There are a lot of attractive opportunities within the S&P 500 that may not be the Magnificent Seven,” said Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America. “The theme is not necessarily ‘rest of world over U.S.,’ but broadening trends outside of just mega-cap tech.”
This shift comes as actively managed funds are seeing a resurgence in performance. According to Morningstar Direct, roughly 49% of actively managed mutual funds and exchange-traded funds that compare themselves to the S&P 500 are beating the index in 2025, up from 38% during the same period last year.
“Stock pickers are holding their smallest allocations of megacap names since the global financial crisis, boosting their funds’ performance in a year that has kicked off with a slide in technology shares,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.
Corporate Highlights: Winners and Losers
The earnings season continued to deliver surprises, with several companies making waves on Wednesday.
- Super Micro Computer Inc. surged 19% after submitting outstanding financial reports to become compliant with Nasdaq rules. The AI server titan, which had faced delisting concerns, saw its shares clear the 200-day moving average, though significant technical damage remains.
- Anheuser-Busch InBev jumped 8.6% after reporting better-than-expected fourth-quarter earnings and revenue. The Bud Light and Corona parent is on track for its best day since October 2021.
- Workday Inc. climbed 7% after beating earnings and revenue estimates, with sales growing to $2.2 billion. The human-resources software company is approaching a buy point of 294 in an early-stage cup-with-handle pattern.
- Grocery Outlet Holding Corp. plunged 28% after missing earnings expectations and announcing a restructuring plan that includes layoffs and fewer store openings. Deutsche Bank downgraded the stock to hold, citing deeper-than-expected challenges.
- AppLovin Corp. tumbled as much as 23% after two short sellers released critical reports on the company, triggering a sell signal as shares fell below the 50-day moving average.
Economic Data and Fed Watch
Investors also digested a mixed bag of economic data. New home sales for January came in at 657,000, below economists’ estimates of 671,000, signaling potential weakness in the housing market. Meanwhile, consumer spending trends remained robust, contradicting recent weak sentiment readings.
“We also think the signal value from consumer surveys is limited as there has been an ongoing disconnect between sentiment and spending,” said Stephen Juneau, U.S. economist at Bank of America. “Sentiment has been weak since the start of the inflation wave, yet consumer spending has been remarkably robust.”
Attention now turns to the release of the personal consumption expenditures (PCE) price index on Friday, the Federal Reserve’s preferred inflation gauge. The data could provide further clues on the central bank’s monetary policy trajectory, with investors hoping for signs of easing inflation that could pave the way for rate cuts later this year.
Looking Ahead: Key Events to Watch
- Thursday: Eurozone consumer confidence, U.S. GDP, durable goods orders, initial jobless claims, and speeches from several Federal Reserve officials.
- Friday: Japan Tokyo CPI, industrial production, retail sales, U.S. PCE inflation, income and spending data, and a speech from Fed’s Austan Goolsbee.
Market Movers: A Snapshot
- Stocks: The S&P 500 rose 0.8%, the Nasdaq 100 added 1%, and the Dow Jones Industrial Average gained 0.5%.
- Currencies: The Bloomberg Dollar Spot Index was little changed, while the British pound rose 0.2% to $1.2697.
- Cryptocurrencies: Bitcoin fell 1.2% to 87,654.74,andEtherdropped3.287,654.74,andEtherdropped3.22,431.99.
- Bonds: The yield on 10-year Treasuries advanced one basis point to 4.30%.
- Commodities: West Texas Intermediate crude fell 0.2% to $68.77 a barrel, while spot gold was little changed.
Conclusion: A Pivotal Moment for Markets
As Nvidia’s earnings loom large, the stock market finds itself at a crossroads. Will the AI juggernaut deliver the numbers needed to reignite the tech rally, or will disappointing results trigger a broader selloff? With economic data and Federal Reserve policy also in focus, investors are bracing for a volatile end to the week.
One thing is clear: The stakes have never been higher for Nvidia—and for the market as a whole. As the AI boom enters its next phase, all eyes are on the chipmaker to see if it can maintain its crown as the king of the AI revolution.