U.S. stocks rose slightly on Wednesday, with the Nasdaq leading the charge alongside signs of fresh movement in AI and strong expectations for a rate cut by the Federal Reserve. The S&P 500 gained about 0.2%, the Dow Jones Industrial Average climbed 0.6%, and the Nasdaq Composite advanced roughly 0.6%, as investors zeroed in on big tech earnings and policy signals.
Sentiment was lifted by comments from President Donald Trump hinting at a solution for Nvidia’s China business and by broad expectations that the Fed will cut interest rates by 25 bps this week—adding to the bullish tone even as markets remain cautious.
Market Movers:
- Teradyne (TER): Shares rallied about 15% after the company posted better-than-expected Q3 results and issued stronger-than-expected Q4 guidance. It also named a new CFO, signaling both operational momentum and leadership renewal.
- Seagate Technology (STX): Stock jumped roughly 17% following strong fiscal Q1 results and guidance that suggests margin improvement. Analysts pointed to higher HAMR drive shipments and tight HDD supply as key drivers.
- Caterpillar (CAT): Shares rose about 12% after robust Q3 results driven by strong demand for energy and transportation equipment supporting AI data-center buildouts. The company reaffirmed full-year margin targets despite tariff headwinds.
- Nvidia (NVDA): The chipmaker advanced around 5% on optimism that export restrictions in China may ease and that its (Blackwell) AI processors stand to benefit. The move pushed its market value toward the historic $5 trillion milestone.
- Joby Aviation (JOBY): Shares gained near 4% after announcing a collaboration with Nvidia to power its autonomous flight system using AI compute architecture. The deal positions Joby at the intersection of aerospace and AI infrastructure.
- Varonis (VRNS): The cybersecurity specialist plunged about 44% after reporting mixed Q3 results, a sharp decline in term license subscription revenue, and guiding full-year revenue below consensus.
- Fiserv (FI): Stock fell roughly 30% after missing Q3 expectations and cutting its full-year EPS outlook significantly. The company also announced major leadership changes and a strategic overhaul.
- Akebia Therapeutics (AKBA): Shares dropped around 21% after the company abandoned plans to expand its drug indication following regulatory challenges, signaling a major setback in its pipeline.
- Etsy (ETSY): Shares fell about 10% despite beating Q3 earnings and revenue, as active buyer metrics and gross merchandise sales came in weak and the company announced a CEO transition.
Tech & Policy Drive the Market Narrative
Investor sentiment is riding on hopes that Nvidia will benefit from a relief in U.S.–China trade restrictions, especially regarding its Blackwell AI processors. That optimism helped the broader tech rally, even as valuations remain lofty. Meanwhile, all eyes are on the Fed. Markets are largely pricing in a 25 bp rate cut this week, a move widely expected to fuel further risk-taking—especially in growth-sensitive sectors.
Despite the overall positive mood, some caution remains. While the Fed may cut rates, the real market test will be in the guidance and forward policy commentary. Investors want confirmation of further easing or a clearly supportive path for growth—anything less could lower enthusiasm. On the tech front, while AI themes remain strong, several companies face scrutiny on margins, monetization, and competition, raising questions about the sustainability of recent gains.
Broader Economic & Trade Context
The delayed release of key inflation and employment data, due to the ongoing government shutdown, has clouded the outlook for the real state of the U.S. economy. That uncertainty highlights the importance of corporate earnings and policy signals in driving near-term stock moves. In trade, the potential meeting between Trump and Chinese President Xi draws attention: any sign of a deal could unlock further upside, but stalled progress or rhetoric could reinstate risk premiums quickly.
Looking Ahead
This week represents a pivotal point for markets: the Fed’s decision, major tech earnings, and trade diplomacy all converge. A solid outcome from any one of these catalysts could fuel the rally higher. But missteps in policy guidance, earnings disappointment, or trade outcomes could just as quickly hurt sentiment. Investors will be watching the upcoming earnings releases closely and remain alert to changes in the risk-reward balance heading into quarter-end.