Financial Markets                      02/25 09:33

   

   NEW YORK (AP) -- U.S. stocks are drifting higher Wednesday ahead of Wall 
Street's main event, which is coming after trading ends for the day when Nvidia 
reports how much profit it made during the end of 2025.

   The S&P 500 rose 0.5% in early trading as moves calmed in the market from 
earlier in the week, when stocks swung sharply as investors tried to separate 
potential losers from winners in the artificial-intelligence boom. The Dow 
Jones Industrial Average was up 159 points, or 0.3%, as of 9:35 a.m. Eastern 
time, and the Nasdaq composite was 0.7% higher.

   Nvidia's chips are at the center of the AI frenzy, and it's become the most 
influential stock in the U.S. market because it's the most valuable. Analysts 
are expecting another blowout report, with estimates for Nvidia's profit to 
surge nearly 70% from a year earlier to $37.52 billion. That's would mean it 
made more than $400 million per day during the three months through Jan. 25.

   Nvidia's profit reports have become a bellwether for the market, not only 
because of how big the company has become in size but also because of how 
influential AI has become over the market's moves. In past years, the AI frenzy 
helped stocks run to record after record amid hopes that it would mean higher 
productivity for the economy and bigger profits.

   More recently, though, concerns have climbed about whether companies like 
Alphabet and Amazon are spending so much on chips from Nvidia and other 
equipment that they'll never be able to make back the investments through 
future gains in productivity. If that leads to a pullback in spending, it would 
hit Nvidia directly.

   Investors have also begun focusing on companies and industries that could 
get undercut by AI-powered competitors. That has led to sudden and swift 
sell-offs for stocks seen as potentially at threat, and the worries have rolled 
through the stock market from industries as seemingly disparate as software, 
trucking logistics and legal services.

   "While those concerns are real, we believe investors would be wise to 
balance them out with offsetting trends that may be underappreciated in the 
current wall of worry headline cycle," according to Darrell Cronk, chief 
investment officer for Wealth & Investment Management at Wells Fargo.

   Among them is the strong growth in profit that big U.S. companies have been 
reporting so far for the end of 2025. That has helped strengthen some corners 
of the U.S. stock market that had been overshadowed by AI mania and Big Tech, 
particularly stocks of smaller companies.

   Cava Group, the fast-casual Mediterranean restaurant chain, jumped 18.6% 
after delivering better profit and revenue for the latest quarter than analysts 
expected. Its revenue for a fiscal year also topped $1 billion for the first 
time, up 22.5% from the year earlier.

   Axon Enterprise leaped 16.5% after the seller of Tasers and body cameras 
with AI voice-activated assistants likewise reported bigger profit and revenue 
than analysts expected.

   They helped offset a 14.2% drop for First Solar, which reported a weaker 
profit than analysts expected.

   In stock markets abroad, indexes rose across much of Europe and Asia.

   Japan's Nikkei 225 rose 2.2%, and South Korea's Kospi gained 1.9% for two of 
the bigger moves.

   In the bond market, the yield on the 10-year Treasury inched up to 4.05% 
from 4.04% late Tuesday.

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   AP Business Writers Yuri Kageyama and Matt Ott contributed.

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