US midday market brief: stocks rise as Nvidia lifts AI trade, Nasdaq leads gains

US stocks displayed resilience on Friday as Nvidia and other AI-focused semiconductor names powered a tech-led rebound, sending the Nasdaq Composite higher while the S&P 500 and Dow Jones also advanced.

The rally came after Micron Technology’s blowout earnings and upbeat guidance reignited confidence that artificial intelligence infrastructure spending remains robust despite recent market volatility.

Investors rotated back into growth stocks after a turbulent week, with the Nasdaq building on Thursday’s strong gains and pushing within striking distance of recent monthly highs.​

Nvidia-led AI rally fuels Nasdaq outperformance

Nvidia emerged as Friday’s biggest driver of market sentiment, surging 3.37% to $180 as Bernstein Research released a bullish analysis highlighting the chip giant’s valuation as historically attractive at 25 times forward earnings, placing it in the 11th percentile of its 10-year range.

The upgrade underscored renewed confidence in AI infrastructure spending projections, with analysts projecting cumulative demand reaching $3 to $4 trillion by 2030.

Advanced Micro Devices climbed 5.37% alongside Nvidia, while the broader Philadelphia Semiconductor Index joined the advance, capitalizing on Micron’s messaging about a tight high-bandwidth memory supply extending through 2026.​

The Nasdaq Composite rose approximately 0.6% at the opening and gained roughly 1% by midday, significantly outpacing the S&P 500, which advanced about 0.5%, and the Dow Jones Industrial Average, which climbed 0.3%.

Trading volume remained healthy as investors digested both positive AI catalysts and the implications of softer inflation data released Thursday.

The Nasdaq has now completed back-to-back days of gains exceeding 1 percent, marking its longest streak of such volatility since April 2025.​

Macro Movers: What traders are watching next

Bond markets provided a nuanced backdrop for the equity rebound.

The 10-year Treasury yield held steady near 4.15% after spiking on Thursday when the Bank of Japan raised interest rates to their highest level since May 2023.

That international monetary policy shift initially unsettled global equities but has since stabilized as markets digest the implications for US rate expectations.

The Federal Reserve’s December rate cut, reducing the fed funds rate to 3.5 to 3.75%, remains the most recent policy action, and traders are now focused on whether the central bank will pause cuts in 2026, given persistent inflation concerns.​

Corporate earnings continued to drive sentiment shifts.

Nike plummeted after revealing ongoing weakness in its Chinese market despite revenue that exceeded Wall Street forecasts, highlighting the difficulty large multinationals face in sustaining margins amid geopolitical pressures.

Conversely, Oracle gained after news that China’s ByteDance reached agreements to establish a TikTok joint venture, signaling potential easing of regulatory uncertainty that has weighed on US tech stocks.

Market strategists noted that the rally appeared driven by both tactical short-covering ahead of month-end positioning and renewed genuine conviction in semiconductor and cloud stocks.

Options markets showed elevated activity as traders bet on potential breakouts above technical resistance levels in Nvidia, with call options on $180 to $182.50 strikes attracting significant volume. ​

Traders will focus on December’s payrolls and retail sales data due early next week, which will provide crucial signals about consumer health and wage growth, key variables for Fed policy in 2026.

Month-end portfolio rebalancing and options expiry could amplify volatility in the final trading sessions before the year closes.​

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