Markets hold strong after AI chip giant’s mixed forecast
The S&P 500 reached a new record on Thursday, buoyed by optimism in artificial intelligence despite Nvidia’s quarterly results slightly disappointing investors. The chipmaker’s 56% revenue jump underscored continued demand for AI infrastructure, but concerns over trade tensions with China led Nvidia to exclude potential China revenue from future projections, triggering a modest 1% stock dip.
Still, the broader market interpreted the report as a bullish signal for the sector. Major AI-linked stocks like Microsoft and Meta gained around 0.5%, while Amazon rose 1.1%. Broadcom, another key AI chip supplier, jumped 3%.
Wall Street’s AI engine continues to push highs
Analysts downplayed the Nvidia dip, citing “sky-high” expectations. “It’s clear that the AI boom remains the central driver of this bull market,” said Ross Mayfield of Baird. The S&P 500 rose 0.25% to close at 6,497.88 points, marking its second consecutive record. The Nasdaq climbed 0.54% to 21,705.67, while the Dow edged up 0.05% to 45,587.83.
Six of the S&P 500’s eleven sectors gained, led by communication services and information technology. Notably, Snowflake surged 22% after upgrading its 2026 forecast, crediting AI demand. HP Inc rose 2% on strong sales of AI-powered PCs, but Hormel Foods sank 13% after a disappointing profit outlook.
Rate cut hopes remain intact
Economic data offered mixed signals. Weekly jobless claims came in below expectations, suggesting resilience in the labor market. Meanwhile, corporate profits showed a rebound in Q2. These indicators reduced immediate recession concerns and maintained investor confidence in potential monetary easing.
The CME FedWatch tool showed traders pricing in an 80% probability of a rate cut in September. However, Friday’s release of the Personal Consumption Expenditures (PCE) inflation index could shift sentiment if inflationary pressures resurface.
Politics and tech regulation intersect again
In a parallel development, Fed Governor Lisa Cook filed a lawsuit challenging President Donald Trump’s attempt to dismiss her, highlighting tensions over the central bank’s independence. Fed Governor Christopher Waller, seen as a proponent of lower rates and a potential successor to Jerome Powell, was also set to speak later in the day.
As the AI narrative fuels Wall Street and policy uncertainty looms, investors remain focused on earnings, inflation, and the Federal Reserve’s next moves.
