The US stock market showed resilience Friday, as Nvidia led a technology-driven rebound. This sent the Nasdaq Composite and Dow Jones higher.
After Micron Technology announced a slew of record earnings, and gave a positive outlook for the future, investors were confident that spending on artificial intelligence infrastructure would remain strong despite recent volatility.
After a volatile week, investors have shifted back to growth stocks. The Nasdaq has built on its strong gains from Thursday and is now within striking distance of the recent monthly highs.
Nasdaq’s performance is boosted by Nvidia AI rally
Nvidia was the biggest Friday market driver, rising 3.37%, to $180, after Bernstein Research published a bullish report highlighting that the chip giant is valued at historically low 25 times its forward earnings. This puts it in the eleventh percentile for the last 10 years.
Analysts project a cumulative demand of $3-$4 trillion by 2030.
Advanced Micro Devices and Nvidia both climbed by 5.37%, but the Philadelphia Semiconductor Index also jumped, leveraging Micron’s message about the tight supply of high-bandwidth memories that will last until 2026.
The Nasdaq Composite gained approximately 1% at midday. This is a significant increase over the S&P 500 which rose about 0.5% and the Dow Jones Industrial Average which gained 0.3%.
The trading volume was healthy, as investors digested the positive AI catalysts along with implications from Thursday’s softer inflation figures.
Nasdaq now has back-to-back gains of more than 1 percent. This is its longest run of volatility of this kind since April 2025.
Macromovers: what traders will be watching next
The bond markets were a subtle backdrop to the stock market recovery.
After spiking Thursday, when Bank of Japan increased interest rates at their highest since May 2023, the 10-year Treasury yield remained near 4.15 %.
The initial impact of the international shift in monetary policy on global equity markets was unsettling, but since then it has stabilized. Markets have digested its implications and are now adjusting their expectations for US interest rates.
Federal Reserve cut the Fed Funds rate in December to between 3.5 and 3.75%. Traders are now focusing on whether or not the central bank is going to stop cutting rates by 2026 due to persistent inflation fears.
The shift in sentiment was driven by corporate earnings.
Nike’s stock dropped after it revealed that its Chinese business was still struggling, even though Wall Street had predicted higher revenue. This highlights the difficulties large multinationals have in maintaining margins in times of geopolitical stress.
Oracle, on the other hand, gained when news broke that China’s ByteDance had reached an agreement to create a TikTok Joint Venture, signaling a potential ease in regulatory uncertainty which has been weighing down US tech shares.
The market strategists observed that both the tactical covering of short positions ahead of monthly positioning as well as renewed conviction in semiconductors and cloud stocks appeared to be driving this rally.
Call options with strikes between $180 and $182.50 attracted significant volumes. Traders were betting on possible breakouts over technical resistance levels for Nvidia.
The data on retail sales and payrolls for December, due next week, will be of great importance to traders. They will give them important signals regarding consumer confidence and wage growth. These are key factors that will determine Fed policy by 2026.
The month-end rebalancing of portfolios and the expiry of options could increase volatility during the last trading session before the end year.
The post US market midday brief: Stocks rise as Nvidia boosts AI trade and Nasdaq gains leads may be updated as new developments unfold.
