US equity markets demonstrated mixed trends on Tuesday, with the Nasdaq 100 down 0.07% at 26,523.99, while the Dow Jones Industrial Average gained 0.24% to 53,682.48 and the S&P 500 up 0.11% at 7,739.43 in early trading. According to Investing.com, the rally in Nvidia (NASDAQ:NVDA) lifted the S&P 500, with nearly all of the index's gains on the day attributable to Nvidia. The equal-weight S&P 500 ETF (NYSE:RSP) finished the day lower by 30 bps, versus a 72 bps gain for the S&P 500. The positive momentum built on Thursday's session where the Dow Jones Industrial Average ended 0.21% lower at 53,463.88 points, while the S&P 500 closed 0.02% lower at 7,675.70 points and the Nasdaq 100 ended marginally higher by 0.05% at 29,224.52 points. As per Investing.com India, the technology sector, S&P 500 and Nasdaq Composite all recorded their strongest gains since August 4, though investors turned more cautious as they booked profits following recent gains.
The standout performer in Wednesday's session was Nvidia, which delivered exceptional quarterly results that sent the AI sector surging and continued to drive Thursday's gains. According to CNBC TV18, Nvidia shares jumped around 6% in premarket trading after the chipmaker beat analysts' expectations and forecast strong revenue growth. The company's fiscal second-quarter revenue more than doubled from a year earlier, with adjusted profit coming in at $2.22 per share. The company's revenue from the data center segment reached $89 billion, representing a 117% jump from the previous year, while edge computing revenue hit $7.2 billion, marking a 27% year-on-year increase. In Thursday's trading session, Nvidia shares surged 8.74% to $227.98, demonstrating continued strong investor confidence in the company's AI-driven growth trajectory. As per The Economic Times, Nvidia shares jumped 6.8%, putting the chipmaker on track to add about $295.7 billion in market value and marking its best single-day performance since June 1, if gains hold. For the third quarter of the current fiscal year, the company forecasts its revenue to be $108.0 billion, plus or minus 2%, with CEO Jensen Huang emphasizing that demand for the company's artificial intelligence accelerators continues to accelerate. This upbeat outlook significantly exceeded analyst expectations, with the company's forecast of 70% revenue growth well above the 44% expected by analysts surveyed by LSEG.
The positive momentum extended beyond semiconductors, with software companies demonstrating strong performance as investors reconsidered the AI value chain. According to Investing.com India, Salesforce (NYSE:CRM) surged 23%, CrowdStrike (NASDAQ:CRWD) gained 20%, and Veeva also rallied sharply following Nvidia's exceptional performance. Salesforce gave investors evidence that AI can be monetized rather than simply bolted onto an earnings presentation, demonstrating the tangible revenue potential of AI integration. CrowdStrike and Okta offered an even more tangible route to revenue, showing how the rise of autonomous AI agents could create fresh demand for cybersecurity, identity management and enterprise controls. The software sector had been cast aside as the ill-fitting middle child of the AI revolution, but suddenly found its footing again as companies began to demonstrate that artificial intelligence may create revenue rather than simply destroy business models. The more independent these systems become, the more businesses will need to monitor, authenticate, and restrain them, creating new demand for software solutions. Other notable performers included CrowdStrike Holdings (20.49%), Veeva Systems (15.19%), Synopsys (13.38%), Adobe (5.73%), and Palantir Technologies (4.74%). In Tuesday's session, Salesdorce Inc. was up 2.33%, while McDonald's Corp shares rose 1.11%, with Nike and Amazon also up nearly 1%, while Johnson & Johnson, Boeing Co. and Visa Inc. were trading lower.
Market attention remains focused on upcoming Federal Reserve developments, particularly regarding interest rate policy. According to The Economic Times, investors will seek further clues on the Federal Reserve's approach to inflation when Kevin Warsh delivers his first major speech as chairman of the central bank this week at the Jackson Hole symposium on Friday. The much-anticipated address offers Warsh an opportunity to address criticism that he has not been sufficiently forthright about his views on the economy. A hotter-than-expected Personal Consumption Expenditures reading on Wednesday had weakened some of the optimism created by a benign consumer inflation report earlier this month. Two Fed officials on Thursday also reiterated concerns about the inflation outlook and maintained their stance that rate hikes may be needed to contain price pressures. Firm jobless-claims data, sticky underlying inflation and higher oil prices have pushed the probability of a hike to roughly one in three, with at least one increase still priced into the remainder of the year. Investors are closely watching Warsh's speech, scheduled for 10 am New York time, as his comments on inflation and interest rates could influence expectations for the Federal Reserve's policy path. Market participants are assessing whether Warsh will take a sufficiently hawkish stance on inflation, with concerns that the Fed may not be tough enough on price pressures contributing to higher long-term bond yields.
The bond market is reflecting uncertainty around Federal Reserve policy outlook, with the yield on the 10-year US Treasury rising one basis point to 4.69%, while Germany's 10-year yield advanced two basis points to 3.28% and Britain's 10-year yield also climbed two basis points to 5.05%. According to Investing.com, the Bloomberg Dollar Spot Index was little changed, while West Texas Intermediate crude fell 0.9% to $82.81 a barrel and spot gold was little changed. The latest cautious trading follows signs of fatigue in US equities after a strong tech-led rally, with investors turning more cautious as they booked profits following recent gains and waited for fresh signals on Federal Reserve interest-rate outlook. The three major US indices were on track to end the week higher following Thursday's rally, with a positive close for the Dow marking its first winning week in three.
