U.S. indexes climb as tech stocks rally, Nvidia shares dip after hours
Major U.S. stock indexes posted gains on Wednesday, driven by strong performance in technology shares, while Nvidia recovered during trading but fell after the market closed amid reports of board turmoil.
U.S. equity markets rose on Wednesday, led by gains in technology stocks after CoreWeave reported optimistic outlooks for its AI business. The Nasdaq Composite and S&P 500 each closed more than 1 percent higher, and the S&P 500 technology sector advanced 2.7 percent.
CoreWeave shares jumped 24.7 percent, with the company saying it expects to become profitable by 2028, easing concerns about its debt-driven expansion. The Dow Jones Industrial Average added 254.60 points, or 0.49 percent, to finish at 52,486.49, while the Nasdaq rose 400.31 points, or 1.60 percent, to 25,466.19.
Nvidia stock rose 2.9 percent during regular trading, partially recouping earlier losses, but fell 8 percent after the bell. The Wall Street Journal, citing people familiar with the matter, reported that Nvidia’s board was considering removing CEO Jensen Huang following allegations of personal misconduct.
"Huang was the one who led Nvidia's rise," said Bruce Zaro, managing director at Granite Wealth Management. "The question is whether someone can step up if he were to resign or be forced out."
Strategists noted that investors were still processing the impact of the recent U.S. midterm elections, which gave Democrats control of Congress, alongside the Nvidia developments.
Globally, MSCI's index of stocks rose 1.12 percent, and Europe’s STOXX 600 gained 0.7 percent as investors returned to AI-linked equities. Oil prices increased after Iran’s security chief said the country would not permit enriched nuclear material to leave, with Brent futures up 1.39 percent to $92.76 and U.S. crude rising 0.57 percent to $86.53.
The U.S. dollar strengthened, climbing 0.7 percent to 102.92 against a basket of currencies, as hotter-than-expected U.S. inflation data reinforced expectations of a Federal Reserve rate hike next month. Traders see a rate increase as likely, with about an 11 percent probability of a half-percentage-point move, according to the CME FedWatch tool.