Wednesday’s advance reflected a pull from artificial-intelligence optimism and a steady stream of company earnings, but it also took place in a market still reacting to concerns about how quickly heavy AI spending could translate into profits. Nvidia was the biggest single driver, climbing 1.6% after Meta Platforms said it would use “millions of chips and other equipment” from Nvidia for its AI data centers as part of a long-term partnership.
Nvidia Chief Executive Jensen Huang linked the deal to Meta’s scale, saying, “No one deploys AI at Meta’s scale.” The AP report said Nvidia’s status as the most valuable company on Wall Street gave the stock extra influence over broader indexes, with traders lifting the S&P 500 alongside Nvidia’s move. Investors, however, have also been weighing risks tied to AI adoption, including how much large companies like Meta are spending and whether the investments can pay back through higher profits and productivity.
The market reaction to Meta itself was mixed even as the Nvidia linkage supported the broader tape. Meta shares fell as much as 1.7% before recovering and rising 0.6%, according to the report. The day’s broader AI narrative also included another risk that analysts have highlighted: if AI systems can perform complex tasks more cheaply, companies in industries ranging from software and legal services to trucking logistics could face competitive pressure.
Beyond the AI story, several earnings reports pushed individual stocks up and down. Cadence Design Systems rose 7.6% after delivering profit and revenue for the latest quarter that topped analysts’ expectations, and its CEO Anirudh Devgan attributed the results to what he called “the essential nature of Cadence’s engineering software,” even as worries persist that AI could reshape parts of the software industry. Analog Devices gained 2.6% after topping analysts’ estimates for profit and revenue and saying it saw record orders during the quarter for its data center business.
Elsewhere in the market, Moderna jumped 6.1% after saying regulators at the Food and Drug Administration will review its flu vaccine candidate after earlier refusing to consider it. Palo Alto Networks, meanwhile, fell 6.8% even after reporting a stronger-than-expected profit for the latest quarter, as its forecasts for the current quarter and the rest of its fiscal year came in below analysts’ estimates.
Rates and macro data also fed into sentiment. The AP report said Treasury yields rose after economic reports that came in better than economists expected. It cited a 10-year yield at 4.08% after rising from 4.05% late Tuesday, and it pointed to data on industrial production, orders for computers and other long-lasting manufactured goods, and homebuilders breaking ground on more new homes than expected in December—signals the report said could keep the Federal Reserve from cutting interest rates sooner.
The Federal Reserve has held its interest rate cuts, but many market participants expect further cuts later this year, with the widespread forecast placing timing in summer after a new chair takes over. Minutes released Wednesday from the Fed’s last meeting showed many officials want to see inflation fall further before supporting additional cuts, according to the report. In Europe, London’s FTSE 100 rose 1.2% after the latest update on U.K. inflation increased expectations for an imminent Bank of England rate cut.
Japan’s Nikkei 225 rose 1% as Prime Minister Sanae Takaichi was reappointed by parliament following a landslide victory for her ruling Liberal Democrats in a Feb. 8 election, with expectations that she will push through policies to support the economy and markets. Elsewhere in Asia, several markets closed for the Lunar New Year holiday.