S&P futures exhibited a modest increase on Wednesday in anticipation of a significant earnings report from Nvidia. Futures associated with the Dow Jones Industrial Average increased by 54 points, representing a 0.1% rise. S&P 500 futures increased by 0.1%, while Nasdaq 100 futures rose approximately 0.2%. Major stock averages experienced an uptick on Tuesday as concerns regarding the potential disruption caused by artificial intelligence across various sectors began to subside. The S&P 500 concluded the session with an increase of nearly 0.8%, whereas the Nasdaq Composite experienced a rise of approximately 1%. The 30-stock Dow experienced an increase of 370 points, translating to approximately 0.8%. Lifting the broader market was a nearly 9% gain in Advanced Micro Devices, which rose after Meta Platforms announced a multiyear deal with the semiconductor company.
Software and cybersecurity stocks experienced a relief rally during the regular session following Anthropic’s introduction of new connectors and plugins for its knowledge worker tool, Claude Cowork. This development enables companies to integrate the AI tool with their existing applications, including Google Drive. Claude Cowork has unsettled the software sector in recent weeks, as investors express concerns that the tool may disrupt the operations of established software vendors. The iShares Expanded Tech-Software Sector ETF added 1.9% on Tuesday, although it continues to be down by more than 25% year-to-date. “I think that it’s been indiscriminate to a point where, yes, it’s gotten a little irrational … there’s room here for a little bit of a correction upward in some of these names,” said Liz Thomas on Tuesday, referring to the plunge in software this year.
Tuesday’s movements precede Nvidia’s quarterly earnings report, along with results from software giant Salesforce and Snowflake, which are expected after Wednesday’s market close. Results from Nvidia arrive as investors reassess elevated valuations in the tech sector and express increasing skepticism regarding the substantial capital expenditures on AI by hyperscalers. For Thomas, Nvidia’s results could still be pivotal for the trajectory of the U.S. stock market; however, their significance has somewhat waned in light of the recent turmoil in software and the focus on swiftly advancing AI tools, such as Claude.
“Numerically, the importance of Nvidia still remains … They need to outperform expectations; they require positive guidance to ensure that market sentiment remains stable,” Thomas stated. She noted, however, that “I don’t think we’re hinging as much on it” compared to previous quarters. In a separate development, investors this week are monitoring the escalating tensions between the U.S. and Iran. Over the past weekend, President Donald Trump threatened to increase global tariffs to 15%, yet a 10% duty on global imports was enacted on Tuesday.