US stocks ended higher on Thursday, with the Nasdaq Composite outperforming the broader market as Nvidia’s strong revenue outlook boosted technology and semiconductor shares.
Investors also looked ahead to Federal Reserve Chair Kevin Warsh’s upcoming Jackson Hole speech amid renewed concerns over inflation and interest rates.
Nvidia earnings lift technology stocks
The Nasdaq Composite gained 1.57% or 411 points to close at 26,540.78, while the S&P 500 advanced 0.72% to 7,730.73.
The Dow Jones Industrial Average rose 0.19% to 53,564.21.
Nvidia shares jumped nearly 9% after the chipmaker exceeded analyst expectations and issued a strong revenue forecast.
Its fiscal second-quarter revenue more than doubled, while analysts expect the company to achieve 70% revenue growth in fiscal 2028, compared with a previous consensus estimate of 44%.
The outlook reinforced expectations that demand for AI computing remains strong, although Nvidia has warned that shortages of memory components could constrain industry growth.
Semiconductor stocks followed Nvidia higher. Broadcom gained 3%, while SK Hynix and Intel rose 1% and 3%, respectively.
The VanEck Semiconductor ETF also advanced 2%.
The S&P 500 Information Technology sector was the strongest-performing sector among the index’s 11 groups.
Software stocks join AI rally
Gains extended beyond chipmakers, with strong earnings from software and cybersecurity companies helping ease concerns about the potential impact of AI on traditional software businesses.
Salesforce surged 23% after reporting second-quarter revenue above Wall Street expectations.
The company had also raised its annual revenue and profit forecasts and introduced a plug-in integrated with Anthropic’s Claude AI models.
Cybersecurity stocks posted even stronger gains.
Okta jumped 29%, while CrowdStrike gained 20% after both companies exceeded analyst expectations and raised their outlooks. Palo Alto Networks rose 13%, while ServiceNow and Adobe also advanced.
The stronger performance from software companies narrowed the gap between software stocks and semiconductor companies, which have been among the main beneficiaries of the AI investment cycle.
However, market gains remained uneven. Moderna shares fell after the company announced a $2 billion convertible bond sale, while HP declined following weaker PC shipments and margins in its latest quarter.
Investors turn to Fed and inflation outlook
With Nvidia’s earnings now behind the market, investor attention shifted toward monetary policy and the Federal Reserve’s annual symposium in Jackson Hole, Wyoming.
Warsh is scheduled to deliver his first Jackson Hole address on Friday, with investors looking for clues about the central bank’s approach to inflation and interest rates.
The outlook has become more complicated after Wednesday’s Personal Consumption Expenditures reading came in hotter than expected.
Two Federal Reserve officials also reiterated concerns about inflation on Thursday and maintained their support for higher interest rates to contain price pressures.
Meanwhile, US jobless claims fell for a second consecutive week, with the overall number reaching its lowest level in a month. The data pointed to continued stability in the labor market.
Investors will therefore assess Warsh’s comments alongside the latest inflation and employment data as they gauge the path for US interest rates and its potential impact on equity markets.
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