US stocks were little changed on Wednesday as traders looked to Nvidia’s upcoming earnings report to ease concerns about stretched valuations in the artificial intelligence sector.
The move followed a four-day slide led by technology shares, which have come under renewed scrutiny as fears of an overheating AI trade intensified.
The S&P 500 rose 0.1%, while the Dow Jones Industrial Average added 20 points.
The Nasdaq Composite gained 0.2%, offering only a modest rebound after several days of losses.
Nvidia shares climbed more than 1% ahead of its third-quarter results due after the closing bell.
Analysts widely expect the chipmaker to post strong revenue growth driven by continued demand for AI processors and related infrastructure.
The company, now the largest constituent in the S&P 500, has become a barometer for broader sentiment surrounding AI-linked equities.
High expectations amid valuation concerns
Despite expectations of another strong report, investors have been cautious.
Nvidia’s recent run-up has set a high bar for performance, and the broader sector has been pressured by profit-taking and growing debate over whether AI stocks have surged too far, too fast.
Chris Senyek of Wolfe Research said he views current worries as exaggerated. “We continue to believe that concerns over an AI bubble bursting are overblown … at least for now,” he wrote.
Senyek added that large technology and communication-services companies remain well positioned should the US economy weaken, and said his team remains constructive on AI stocks, while waiting for “either an upside NVDA surprise or more washed out technical to become more aggressive buyers.”
Tuesday’s session extended the market’s downward streak, with the S&P 500 and Dow registering a fourth straight day of losses — the S&P 500’s longest since August.
The Nasdaq has fallen in five of the past six sessions. Bitcoin briefly dipped below $90,000 before recovering, while gold rebounded from a one-week low.
Global pressure builds as AI stocks cool
Overseas markets tracked the US weakness, reflecting how heavily global sentiment is tethered to the performance of AI-linked equities.
European and Asian markets saw consecutive down days, with the Stoxx 600 hitting a one-month low on Tuesday.
Major European bourses opened mixed on Wednesday, while Asia-Pacific markets continued to decline.
In the US, stock futures were little changed overnight as investors awaited clarity from Nvidia’s results.
AI-related names, including Nvidia, Palantir, and Microsoft, continue to face pressure, with traders assessing whether fundamentals still justify lofty valuations across the sector.
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