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US stocks rallied on Wednesday as Wall Street was led higher by tech stocks while bracing for Nvidia’s crucial earnings report.
The Nasdaq Composite (^IXIC) led the way up, gaining nearly 1.3%, coming on the heels of a strong Tuesday session that saw investors rotate back into technology shares. Meanwhile, the S&P 500 (^GSPC) climbed by roughly 0.8%, while the Dow Jones Industrial Average (^DJI) gained roughly 0.6%.
With earnings still rolling on, eyes now turn to Nvidia’s (NVDA) quarterly results, due Wednesday after the bell, alongside earnings from Salesforce (CRM) and Snowflake (SNOW). The reports arrive as investors reassess elevated tech valuations and scrutinize heavy AI-related capital spending by hyperscalers.
AI disruption remains in focus, with spirits once again upbeat after AI startup Anthropic introduced new enterprise capabilities on its Claude platform, allowing integration with corporate applications such as Google (GOOG) Drive, DocuSign (DOCU), and LegalZoom (LZ).
Elsewhere, (CRCL) stock surged by more than 30% on Wednesday after the stablecoin issuer posted an increase in fourth quarter revenue. Home improvement group Lowe’s (LOW) beat Wall Street estimates, but shares fell as guidance disappointed.
Meanwhile, setting the tone for the week, President Trump delivered his 2026 State of the Union address Tuesday night. After Trump experienced the first major legal pushback to his tariffs over the past week, the address saw Trump rail against the Supreme Court while pushing forward on his plans.
LIVE COVERAGE IS OVER 23 updates
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Nvidia pops in after hours as earnings, guidance blow past expectations
Yahoo Finance’s Dan Howley reports:
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Cava stock surges 26% as the chain homes in on its value perception
Cava (CAVA) posted earnings and revenue beats in its fourth quarter results, sending the stock up nearly 30% on Wednesday.
In the fourth quarter, revenue grew to $278 million, more than the $268 million Wall Street predicted, according to Bloomberg consensus data. Adjusted earnings beat too, coming in a penny higher than expectations. Same-store sales increased 0.5%, ahead of the Street’s forecast for a decline of 1.36%.
“In a dynamic environment, consumers are gravitating toward brands delivering real value every day. CAVA’s disciplined execution, differentiated Mediterranean cuisine, and commitment to hospitality continue to drive strong demand and reinforce the durability of our model,” Brett Schulman, Cava co-founder and CEO, told Yahoo Finance.
In the third quarter, Schulman said that Gen Z customers visited Cava restaurants less frequently and the company was seeking to improve its “relative value proposition every year.”
Now, by focusing on customer loyalty and menu innovation (with items like pomegranate-glazed salmon, set to launch this quarter), the company said it has improved its value perception despite a 1.4% increase in menu prices in January of this year.
“The robust performance of new units in both new and existing markets speaks to the ultimate opportunity for CAVA to become a much larger brand relative to roughly 440 locations today,” William Blair analyst Sharon Zackfia wrote in a note to clients.
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Dow, S&P 500, Nasdaq rise ahead of Nvidia earnings
US stocks jumped on Wednesday as investors went risk-on again and braced for Nvidia’s crucial earnings report.
The Nasdaq Composite (^IXIC) rose nearly 1.3% as tech stocks led the market higher. The S&P 500 (^GSPC) climbed roughly 0.8%, while the Dow Jones Industrial Average (^DJI) inched up 0.6%.
All eyes are on Nvidia’s (NVDA) quarterly results due after the closing bell. The AI chip heavyweight is seen as a barometer for the AI trade.
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Lowe’s stock falls as company confronts ‘reality’ of tariffs, sluggish housing market
Yahoo Finance’s Brooke DiPalma reports:
Read more here.
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Bitcoin hovers near $69,000 as investors go risk-on
Bitcoin (BTC-USD) rose back above $69,000 on Wednesday as investors went risk-on.
The token rose more than 7% to snap a three-session losing streak ahead of Nvidia’s (NVDA) earnings, seen as a barometer for the AI trade.
Ether (ETH-USD) also gained about 10% to hover above $2,000 per token as the crypto complex rose.
It has been a volatile stretch for bitcoin, which tumbled from a record high near $126,000 in October and posted four straight months of losses.
Meanwhile, Wall Street analysts have lowered their price targets for the world’s largest cryptocurrency, in what many investors are calling a crypto winter.
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Nasdaq pops, semis run, Nvidia holds the mic
It’s been a gap-and-go day for the Nasdaq (^IXIC), which is on track for its best day in a couple weeks. It jumped over its 20-day moving average this morning and is now heading for it’s 50-day around 23,250.
Tech (XLK) is leading large-cap sectors today, as the Philly semiconductor index (^SOX) notched its thirteenth intraday record high of the year.
Yes, we’ve seen this movie before. With hindsight, the way to play these fast, tech-led rallies over the last four months would have been to fade the Nasdaq after a few days while holding on to a select group of smaller and foreign chip stocks (like TSM, WDC and SNDK).
Notably, Nvidia is not in this cohort. The chip giant has been trading sideways for over six months, and both the Nasdaq and XLK are slightly underwater year-to-date.
But Nvidia (NVDA) has perked up over the last four days and is hitting fresh three-month highs today. If Huang & Co. deliver tonight, the focus might shift back to record highs for the Nasdaq and S&P 500 (^GSPC). If not, the “rotation trade” probably stays in charge a while longer.
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Citadel says the market’s biggest fear about AI ruining everything ‘violates accounting identities’
The thought exercise posted by Citrini Research on Substack over the weekend continues to ping around Wall Street.
In a piece published Tuesday evening, Frank Flight, macro strategist at Citadel, offered a rebuttal of sorts to the depressing scenario outlined in Citrini’s post that described a not-too-distant future in which AI has displaced millions of jobs, consumer spending has plummeted, and the benefits of AI’s relentless march accrue to a select few companies, their employees, and investors.
In his post, Flight takes on a number of assumptions that underpin the argument that underpins what Citrini dubbed the Global Intelligence Crisis 2028.
My favorite raises the issue of accounting identities, or simply the idea that losses from one sector of the economy show up as gains somewhere else.
We’ll quote Flight at length, with their emphasis:
There is plenty of discussion in Flight’s post, grounded in data, about how little hard evidence there is that AI is displacing workers.
There is plenty of discussion on LinkedIn about how AI is going to replace every worker.
But workers are the consumers of the output that your business creates. You, the worker, are on the supply and demand side of the economy, even when another day in the trenches of your firm’s preferred productivity tool and a slug of Teams meetings makes you feel like a replaceable cog.
Too much is made, in my view, of the idea that members of the class of “laptop workers” are doing things that don’t matter, or could be done cheaper, or by AI.
And far too little is made about the role every worker also plays in a US — and increasingly global — economy where the vast majority of growth and profits come from consumer spending.
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Diageo stock plunges after guidance reflects ‘changing’ habits, young people drinking less
Diageo (DEO) stock is down roughly 14% as the maker of Guinness cut its sale guidance,
The company expects organic revenue growth to decline 2% to 3%, more than the 1% decline Wall Street forecast, per Bloomberg consensus data.
“What’s happening is the way people are choosing to engage with the category is changing, particularly for younger people,” CEO Dave Lewis told investors on a call, adding, “They’re making choices about where and how they choose to socialize that are different.”
Lewis said the company saw strong performance in Europe, Latin America, and Africa, which was offset by a “weakening performance” in the North American market.
The company, in part, blamed the underperformance on “economic pressure” on US households, saying consumers are spending roughly 25% more on general staples than five years ago and therefore have less disposable income to spend on alcohol.
“Alcohol spending as a share of household budgets is hovering near 40-year lows — not due to price changes, but because consumption is falling,” Bank of America wrote in a note to clients on Tuesday.
The firm added that the biggest shift in spending is coming from younger generations, who are spending more on working out than at bars.
“Gen Z in particular are seeing stronger spending growth for fitness and active hobbies than bars,” the firm wrote.
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Nvidia earnings favor patience, not playing for a pop
At the risk of adding to the Nvidia (NVDA) earnings drumbeat, here are a few stats worth thinking about today — especially if the fate of the “whole world” truly hinges on Jensen Huang’s execution.
The last ten earnings reactions the day after the report have nearly been a wash: 5 wins (averaging a 6% gain) versus 5 losses (averaging a 4% drop).
The chart below shows the median return over the last ten years, or 40 reports, an shows returns if you bought just before earnings and held for various time frames.
What jumps out is that returns are barely positive until you stretch the holding period to a full quarter, when the meian return hits 14% median return.
And the odds clearly tilt toward the long-term holders — a one-year hold after buying just before earnings carries a 93% median return with an 84% win rate.
Meanwhile, the options market is pricing in about a 5% move in either direction, versus Nvidia’s average daily move of 3% over the last quarter.
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Netflix stock rallies after Warner Bros. Discovery’s board says Paramount offer may be ‘superior’
Netflix (NFLX) stock rallied on Wednesday after Warner Bros. Discovery’s board of directors said that Paramount Skydance’s (PSKY) revised proposal for its assets may be the “superior proposal,” reigniting a bidding war that has stretched on for months.
Paramount has offered to buy Warner Bros. entirely in cash for $31 per share, most recently sweetening its deal by offering a $0.25 daily ticking fee per quarter if the deal does not close by Sept. 30 and offering to pay termination fees if regulators stop the deal from closing.
In December, Netflix agreed to buy Warner Bros. Discovery’s streaming and studio assets for $27.75 per share in a deal valued at $72 billion. But that deal may no longer be the frontrunner, providing some relief to investors that skeptical of the M&A strategy
Investors say Paramount Skydance needs Warner Bros. Discovery more than Netflix does.
“The bottom line for us is that Netflix does not need this deal, and the regulatory path is unclear at best,” Wedbush analyst Alicia Reese wrote in a Feb. 20 note. “Its business is entirely healthy on its own, with a burgeoning global advertising business. … The primary benefit of an integration with Warner Bros. is the advertising opportunity. However, Netflix could walk away without injury. Paramount-Skydance may not.”
Warner Bros. Discovery shares fell more than 0.5% in late morning trading, while Paramount Skydance stock rose 0.4%. Netflix stock jumped 5%.
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DOE loans Southern Company $26.5 billion for power generation projects in Georgia and Alabama
Utility and power giant Southern Company (SO) received a $26.5 billion loan from the federal government for two of its subsidies to build new power generation projects in Georgia and Alabama.
Shares in Southern Company shed roughly 1.3% through mid-morning trading.
The loan package, extended by the Department of Energy, is set to finance more than 16 gigawatts’ worth of power generation projects that should “deliver over $7 billion in electricity cost savings to millions of customers in Georgia and Alabama,” the department said in its announcement.
The package should also “reduce Southern Company’s interest expenses by over $300 million per year, helping expedite lower electricity costs for customers,” according to the announcement.
Planned projects include 5 GW of gas generation capacity, 6 GW in upgraded nuclear capacity, battery storage systems, and more than 1,300 miles of transmission and “grid enhancement” projects.
The package also marks the largest loan ever given out by the department.
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Axon stock surges on earnings beat, strong federal procurement
Shares in Axon Enterprises (AXON) surged by more than 15% in the first minutes of Wednesday’s trading session after the company beat earnings and revenue estimates and reported strong federal procurement spending.
Axon reported adjusted earnings per share of $2.15 per share, exceeding estimates of $1.60. Revenue for the quarter was $796.7 million, above estimates of $755.3 million. Annual bookings grew to $7.4 billion, an increase of 46% year-on-year, Axon said in its earnings report.
“There is a major opportunity across federal law enforcement or a number of our core products, as well as counter UAS (unmanned aircraft system) technology,” Axon president Joshua Isner said on the company’s earnings call.
In its earnings report, Axon also touted advancements under its “AI Era Plan,” including embedded AI capabilities throughout its products, such as report-writing “Draft One” and the voice-activated AI companion platform “Axon Assistant.”
The company noted that customers were already seeing benefits, including a “high-risk traffic stop” by the Bernalilo County Sheriff’s Office, conducted with live translation delivered through Axon Assistant.
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US stocks rise at Wednesday’s opening bell
The US stock market gained ground after the opening bell on Wednesday with Nvidia’s crucial earnings report on deck.
The Nasdaq Composite (^IXIC) led gains, picking up roughly 0.7% after a strong Tuesday session that saw investors rotate back into technology shares. Meanwhile, the S&P 500 (^GSPC) climbed by roughly 0.5%, while the Dow Jones Industrial Average (^DJI) gained roughly 0.3%
Alongside Nvidia’s fourth-quarter earnings, set for release after Wednesday’s closing bell, Salesforce (CRM) and Snowflake (SNOW) will also publish their quarterly reports as investors look for potential weaknesses in tech valuations and AI-related capital spending.
Shares in Circle (CRCL) turned up by more than 20% at the open on Wednesday after the company reported an increase in fourth quarter revenue. Lowe’s (LOW) beat analyst estimates, guidance below expectations sent shares falling.
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US trade representative: US aims to keep tariffs on China where they are
The White House will seek to keep levies on China at the levels set before the Supreme Court decision striking down large swaths of President Trump’s tariff regime, US Trade Representative Jamieson Greer said Wednesday morning.
In comments to Fox Business, Greer said the US is aiming to maintain its tariffs of 35% to 50% on goods from China — now using alternative methods.
“We expect that level to remain in place. We don’t intend to escalate beyond that,” Greer said Wednesday morning. “We intend to really stick to the deal that we had before.”
On Friday, the Supreme Court ruled that the president’s use of the International Emergency Economic Powers Act (IEEPA) to impose wide-ranging tariffs on foreign nations was illegal.
The White House has instituted a temporary 10% global levy since the ruling, and Greer said Wednesday morning that the US will soon be announcing a bump-up to 15% on its temporary 150-day global tariff. The administration is expected to use that window to implement new measures under other legislative authorities, such as the Trade Act’s Sections 301 and 232.
President Trump will head to Beijing for a meeting with Chinese leader Xi Jinping at the end of March, where the leaders of the world’s two largest economies are expected to discuss trade deals.
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Market structure ‘more fragile’ and vulnerable to a major move, Apollo’s Sløk says
The market looks vulnerable to a major swing, Apollo chief economist Torsten Sløk wrote in a note Wednesday. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)
As artificial intelligence concerns sweep through various sectors, Sløk notes that speculative activity has picked up, the variation between individual stock names has grown larger, and stocks are moving less together. Taken together, these factors suggest confidence in the market may be
“The share of S&P 500 names moving more than 10% in a single day has increased, and high dispersion and low implied correlation suggest stocks are increasingly trading on their own fundamentals,” Sløk wrote. “At the same time, options activity remains extremely elevated, consistent with heavy retail speculation and leverage-like exposure. Larger idiosyncratic moves and outsized options participation leave the market structure more fragile and more vulnerable to an abrupt, outsized move.”
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Strong earnings not enough to power stocks past AI, credit worry
Despite corporate America delivering one of the strongest earnings seasons on record, you wouldn’t exactly know it by looking at the stock market.
Bloomberg reports:
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Circle stock jumps after Q4 revenue rises on stablecoin growth
Circle (CRCL) stock rose 14% on Wednesday during premarket hours after reporting an increase in fourth quarter revenue, as its income from reserves got a boost from a rise in circulation of its stablecoin token, USDC.
Reuters reports:
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Gold rises as traders weigh tariff risks and Middle East tension
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First Solar stock falls after revenue guidance misses analyst expectations
First Solar (FSLR) stock sank 15% during premarket hours on Wednesday after the company, which manufactures solar panels, reported higher profit within its fourth quarter earnings but issued revenue guidance for 2026, which missed analyst expectations.
The Wall Street Journal reports:
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Workday stock plunges 9% as outlook falls short of expectations
Workday (WDAY) stock plunged around 9% during premarket hours on Wednesday after the enterprise applications company reported an adjusted earnings beat but disappointing guidance. The quarterly results come as software stocks like Workday have sold off on concerns that artificial intelligence could automate and eat away at their core businesses.
In the fourth quarter, Workday reported revenue of $2.53 billion, a 14.5% annual increase, which just managed to exceed estimates of $2.52 billion, according to S&P Global Market Intelligence. Subscription revenue hit $2.36 billion.
Adjusted earnings per share of $2.47 also beat the Street’s expectations of $2.32 per share.
But Workday’s subscription revenue guidance fell short of expectations. The company expects first quarter subscription revenue of $2.335 billion, suggesting a slowdown from the current quarter, and full-year subscription revenue of $9.92 billion to $9.95 billion.
Workday stock was already down more than 9% over the past five days as worries about AI disruption coursed through the sector, fueled by a doom-and-gloom report from Citrini Research.
