U.S. Stocks Close Mixed After Early Move To The Upside

Stocks showed a strong move to the upside early in the session on Wednesday but gave back ground over the course of the trading day. The major averages pulled back well off their highs of the session, although the Nasdaq and the S&P 500 managed to close in positive territory.

After surging by as much as 1.3 percent, the tech-heavy Nasdaq ended the day up 48.88 points or 0.3 percent to 19,075.26. The S&P 500 eked out a more modest gain, inching up 0.81 points or less than a tenth of a percent to 5,956.06, while the narrower Dow bucked the uptrend and slid 188.04 points or 0.4 percent to 43,433.12.

The early strength on Wall Street partly reflected bargain hunting following recent weakness, which saw the Nasdaq and the S&P 500 close lower for four straight sessions.

The tech-heavy Nasdaq tumbled to its lowest closing level in three months on Tuesday, while the S&P 500 fell to a one-month closing low.

Buying interest waned over the course of the session, however, as traders expressed caution ahead of earnings news from Nvidia (NVDA).

The AI darling and market leader pulled back off its best levels but closed up by 3.7 percent ahead of the release of its fourth quarter financial results after the close of today’s trading.

“Nvidia is due to report its fourth-quarter and full-year results on Wednesday and investors will be looking forward to the usual demolition of forecasts and also positive guidance for the next quarter from chief executive Jensen Huang,” said AJ Bell investment director Russ Mould.

“Failure to deliver the customary upside surprise might not sit well,” he added. “Nvidia’s shares are no higher than they were last summer, despite strong earnings and ongoing investor enthusiasm for all things related to artificial intelligence, so any unexpected disappointment could cause some share price turbulence.”

The pullback by stocks also came after President Donald Trump reiterated he is “not stopping” previously delayed tariffs on Canada and Mexico.

While a 30-day pause on those tariffs is set to expire on March 4th, Trump indicated the tariffs would take effect on April 2nd, the same day he purportedly plans to announce reciprocal tariffs on other U.S. trade partners.

In U.S. economic news, the Commerce Department released a report showing a substantial pullback by new home sales in the U.S. in the month of January.

The Commerce Department said new home sales plunged by 10.5 percent to an annual rate of 657,000 in January after spiking by 8.1 percent to an upwardly revised rate of 734,000 in December.

Economists had expected new home sales to slump by 2.6 percent to an annual rate of 680,000 from the 698,000 originally reported for the previous month.

Sector News

Networking stocks saw substantial strength on the day, with the NYSE Arca Networking Index surging by 2.8 percent after ending the previous session at its lowest closing level in over a month.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.1 percent jump by the Philadelphia Semiconductor Index.

Computer hardware, gold and brokerage stocks also saw notable strength, while housing stocks came under pressure over the course of the session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index jumped by 1.0 percent and Hong Kong’s Hang Seng Index spiked by 3.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index shot up by 1.6 percent, the French CAC 40 Index surged by 1.2 percent and the U.K.’s FTSE 100 Index climbed by 0.7 percent.

In the bond market, treasuries moved higher over the course of the session, adding to recent gains. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.9 basis points to a new two-month closing low of 4.249 percent.

Looking Ahead

Trading on Thursday is likely to be impacted by reaction to Nvidia’s earnings and guidance, while reports on jobless claims, durable goods orders and pending home sales may also attract attention.