Stocks Climb Late as Nvidia Reignites AI Hopes: Markets Wrap

(Bloomberg) — Stocks climbed in late hours on speculation that Nvidia Corp.’s upbeat earnings will add fuel to the artificial intelligence-driven rally.

A roughly $600 billion exchange-traded fund tracking the S&P 500 (SPY) rose after the close of regular trading. The world’s most-valuable chipmaker climbed about 5% after giving a solid revenue forecast for the current period, even as a slowdown in China weighed on results. The outlook shows Nvidia is ramping up production of Blackwell, its latest semiconductor design.

“Wednesday’s Nvidia earnings report is pivotal not just for Nvidia but for the entire stock market, as it can rejuvenate investor optimism across the board and help investors to focus on the power of AI and less on headlines out of Washington on tariffs and taxes,” said James Demmert at Main Street Research.

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At Interactive Brokers, Steve Sosnick says he doesn’t think it’s an exaggeration to say that Nvidia’s earnings are the most-consequential report of any given quarter. 

“It is no coincidence that the recent bull-market run started in late 2022, almost exactly coinciding with the release of ChatGPT,” he said. “And no stock has epitomized the AI gold rush more than Nvidia.”

In regular hours, equities had extended losses in the final stretch of US trading, with the S&P 500 closing down by 0.6%. News reports that the Trump administration is moving to restrict the sale of chip design software to China spurred a plunge in Cadence Design Systems Inc. and Synopsys Inc. Meantime, Tesla Inc. was said to begin its robotaxi service in Austin on June 12.

Treasuries pared losses after solid investor demand in a $70 billion auction of five-year notes offered the latest evidence of appetite for shorter-term securities. As expected, minutes of the latest Federal Reserve policy meeting reflected a wait-and-see approach.

A dollar gauge added 0.3%. Oil climbed as traders weighed risks to Iranian and Russian supplies.

Read: Why Is Nvidia the King of AI Chips, and Can It Last?: QuickTake

Nvidia sales will be about $45 billion in the second fiscal quarter, which runs through July, the company said on Wednesday. That included the loss of roughly $8 billion in revenue from China because of export controls. The forecast was in line with analysts’ estimates, according to data compiled by Bloomberg.

Nvidia and fellow megacaps were among the biggest decliners in last month’s rout that sent the S&P 500 to the brink of a bear market. Many of the stocks have recouped much of the losses after President Donald Trump temporarily paused the stiffest levies and earnings showed demand remains intact.

The chipmaker’s surge from its April lows hasn’t been accompanied by high volumes, suggesting some investors might have missed out on the rally. An upbeat earnings report would bode well for US stocks as investors have about $7 trillion parked in cash funds, BBVA strategists have estimated.

Traders also kept a close eye on the latest headlines around global trade negotiations.

The European Union’s trade chief, Maros Sefcovic, plans to speak to US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer Thursday, seeking to fast-track negotiations to reach a deal before a July 9 deadline. 

Trump bristled at suggestions that Wall Street believed he was ultimately unwilling to follow through on extreme tariff threats, saying Wednesday his repeated retreats were strategic efforts to exert trade concessions.

“The latest trade developments remain in line with our base case that pragmatism will ultimately prevail over confrontation,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “So far, the Trump administration has appeared to temper its more strident tariff policies in response to signs of distress in markets.”

Assuming trade tensions continue to ease, she sees room for the equity market rally to resume into 2026, with the S&P 500 reaching around 6,400 by June of next year. The gauge closed at 5,888.55 on Wednesday.

“Headline risk obviously remains a short-term driver of the tape, creating volatile back-and-forth action,” said Dan Wantrobski at Janney Montgomery Scott. “We thus anticipate further choppiness for the remainder of the year along these lines, but with a general upward bias above the 5,500-5,750 range and the potential for new highs at some point.”

Investor exposure to equities is still low enough that the “path of least resistance” for the market is higher, according to Barclays Plc’s Emmanuel Cau. Absent a volatility shock, “systematic buying could continue to help equities to grind higher,” he wrote in a note.

“The reactivity of the market continues, with a surge following the delay of the tariff implementation, though the equity market has settled into a range that suggests the panic from April is behind us, but further catalysts are necessary to drive the next phase of the bull market,” said Mark Hackett at Nationwide.

Corporate Highlights:

• Salesforce Inc. raised its annual sales forecast, suggesting that its AI agent product is on a path to contribute significant revenue.
• HP Inc.’s profit outlook fell short of estimates and the company cut the annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs on goods from China.
• President Trump said that the US government would retain guarantees and an oversight role over Fannie Mae and Freddie Mac even as he pursues a public offering for the mortgage giants.
• Macy’s Inc. posted better-than-expected quarterly results — a sign the company’s strategy of focusing on its best-performing locations is paying off despite weakening consumer sentiment and tariff volatility.
• Abercrombie & Fitch Co. upped its full-year outlook, suggesting confidence in its ability to navigate the changing tariff landscape.
• Dick’s Sporting Goods Inc.’s chairman pushed back on criticism of its pending acquisition of struggling footwear chain Foot Locker Inc.
• Vail Resorts Inc., a ski resort operator, said Executive Chairperson Rob Katz will return to the role of chief executive officer, replacing Kirsten Lynch, who stepped down.
• Honeywell International Inc. agreed to cooperate with Elliott Investment Management and add a member of the activist shareholder to its board as the industrial firm prepares to split into three companies.
• The Trump administration issued a stripped-down license to Chevron Corp. to remain in Venezuela, allowing the company to conduct minimal maintenance on equipment but prohibiting it from producing oil in the sanctioned South American nation.
• Victoria’s Secret & Co. has stopped some office operations and told employees to avoid using company technology amid a “security incident” that also disrupted the retailer’s online shopping website and some store services.

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.6% as of 4 p.m. New York time
• The Nasdaq 100 fell 0.5%
• The Dow Jones Industrial Average fell 0.6%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.3% to $1.1290
• The British pound fell 0.3% to $1.3465
• The Japanese yen fell 0.4% to 144.89 per dollar

Cryptocurrencies

• Bitcoin fell 2.5% to $106,914.73
• Ether fell 1.9% to $2,617.86

Bonds

• The yield on 10-year Treasuries rose three basis points to 4.47%
• Germany’s 10-year yield advanced two basis points to 2.55%
• Britain’s 10-year yield advanced six basis points to 4.73%

Commodities

• West Texas Intermediate crude rose 1.1% to $61.55 a barrel
• Spot gold fell 0.1% to $3,296.98 an ounce

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