U.S. and Canadian stocks climbed on Wednesday, clawing back some ground lost during the recent selloff as investors positioned themselves ahead of Nvidia’s much-anticipated quarterly results and crucial employment data that had been unavailable during the longest-ever U.S. government shutdown.
All three major U.S. stock indexes closed in positive territory, with tech strength putting the Nasdaq out front. The S&P/TSX Composite Index outperformed all of them, rising 0.8%.
Chipmaker Nvidia, which has come to represent the nascent artificial intelligence technology that has powered much of the stock market’s rally in recent months, reported better-than-expected earnings and forecast fourth-quarter revenue above estimates. Shares rose 5% in post-market trading.
Shares of Advanced Micro Devices rose 2.8% after the bell, while Alphabet was up 1.6% and Palantir Technologies was up 4%.
“The market is breathing a big, collective sigh of relief because Nvidia is confirming that AI demand is strong,” said Adam Sarhan, chief executive of 50 Park Investments in New York. “If it sticks and stays by tomorrow’s close ... this little pullback in the market could end.” The S&P 500 is still down more than 3% from its October highs.
Minutes from the Fed’s October meeting showed policymakers were more divided than usual, lowering interest rates even as some members cautioned the move could quell efforts to cool inflation.
The recently ended government shutdown resulted in a backlog of official economic data, which is now beginning to flow. The Labor Department’s September employment report is slated for release on Thursday. Should the report fall short of expectations, it could affect the U.S. Federal Reserve’s interest rate decision at the conclusion of next month’s monetary policy meeting. Even so, the Labor Department announced it would release a combined October/November employment report as the shutdown hindered critical data collection, so the Fed will have less information on the state of the labor market when it meets in December.
The Dow Jones Industrial Average rose 47.03 points, or 0.10%, to 46,138.77, the S&P 500 gained 24.87 points, or 0.38%, to 6,642.19 and the Nasdaq Composite rose 131.38 points, or 0.59%, to 22,564.23.
The S&P/TSX composite index ended up 241.95 points, or 0.8%, at 30,278.41.
Brookfield Asset Management launched a $100 billion AI infrastructure program in partnership with Nvidia and Kuwait Investment Authority as demand for computing and energy to support AI applications accelerates. Shares of Brookfield Asset Management were up 2.1%.
The Toronto market’s technology sector rose 2.3%, with shares of e-commerce company Shopify Inc up 4.6%.
The materials group, which includes metal mining shares, added 1.3% as gold and copper prices rose. The energy sector was under pressure as crude prices slid on reports of a U.S.-proposed resolution to Russia’s war on Ukraine.
The yield on benchmark U.S. 10-year notes rose 0.8 basis points to 4.129%, from 4.121% late on Tuesday.
The 30-year bond yield added 0.8 basis points to 4.7487% from 4.741% late on Tuesday.
Reuters, Globe staff