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US stocks gained in a choppy trading session on Wednesday in the run-up to a high-stakes earnings release from chipmaker Nvidia, as markets extended their recent volatile run.
The Nasdaq Composite rose as much as 1.7 per cent in early trading on Wednesday morning, before falling back to trade 0.6 per cent higher by lunchtime. The S&P 500 was 0.2 per cent higher.
Nvidia was up 2.2 per cent ahead of its third-quarter results, due to be published after the market closes. Investors are preparing for a share price swing worth hundreds of billions of dollars in the stock of a company at the centre of this year’s artificial intelligence-powered rally on Wall Street.
Guy Miller, chief market strategist at insurer Zurich, said recent volatility in tech stocks was “healthy, following a period of complacency”.
However Miller warned that Nvidia results on Wednesday evening would be a “binary event” for markets, “with the largest company in the world likely determining the fate of markets into year end”.
Big tech stocks, which have pulled back sharply in recent weeks amid concerns over elevated valuations and the vast scale of corporate investment being poured into AI infrastructure, recovered some of their recent losses.
Google parent Alphabet’s share price jumped 4.1 per cent in morning trading. Warren Buffett’s Berkshire Hathaway revealed a $4.3bn stake in the company last week, in filings that offer a snapshot of positions at the end of September.
Broadcom climbed 3 per cent and Intel rose 1.6 per cent.
“The understandable fear is that this is a very crowded trade and that a casual walk to the exit could turn into something less orderly should cause be found,” said Chris Turner, head of markets research at ING. “Hence the intense interest in [Wednesday’s] release of third-quarter results for Nvidia.”
Across the Atlantic, the Stoxx Europe 600 closed 0.1 per cent higher after shaking off early losses. The Dax also rose 0.1 per cent.
The dollar rose 0.5 per cent against a basket of other currencies, including the pound and the euro.
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