The Dow Jones Industrial Average rose about 200 points, or 0.4%, near 49,400, while the S&P 500 gained 0.54% to about 6,927 and the Nasdaq added roughly 1%. Markets built on Tuesday’s rebound, with muted trading ahead of Nvidia’s fiscal Q4 2026 results after the close.
Nvidia was expected to report earnings per share of $1.53 on revenue of $65.7bn, implying about 68–72% year-on-year growth. Meta, Alphabet and Amazon guided to over $500bn in 2026 capex, Nvidia shares were about 1% higher, and Polymarket priced a 94.5% chance of an earnings beat.
Software Stocks Rebound
Software stocks extended a recovery after the iShares Expanded Tech-Software Sector ETF (IGV) fell nearly 5% on Monday. IBM rose 2.5% after a 13% drop on Monday, while Microsoft gained 2.2% and several other software and cybersecurity names moved higher.
PayPal rose for a second day, up 13% over two sessions on reports Stripe is weighing a deal for all or parts of the company. PayPal closed Tuesday at $47.02 with a market cap near $43bn, compared with Stripe’s reported $159bn private valuation.
Gold traded around $5,120 per ounce after dipping below $5,200. The CME FedWatch Tool showed a 96% probability of no rate change on 18 March, with the target range at 3.50–3.75%.
We see the market is cautiously positioned ahead of Nvidia’s results later today. Options markets are currently pricing in a potential move of over 11% in either direction, a reflection of how critical this report is for the entire AI sector. This presents a clear opportunity for traders who are focused on playing event-driven volatility rather than picking a specific direction.
Event Driven Trading Focus
The rebound in software stocks like Salesforce and IBM suggests the AI-disruption panic from earlier this week is subsiding. We are looking at this as a potential buying opportunity, especially if Nvidia’s report confirms continued strong AI spending. The iShares software ETF (IGV) has already recovered more than half of Monday’s sharp 5% loss, showing renewed confidence in the sector.
The situation with PayPal is now driven entirely by merger speculation, not its underlying business performance. This has caused implied volatility on its options to surge, making them expensive but also presenting opportunities for premium sellers. Given that talks with Stripe are described as preliminary, a short-term trade may be more prudent than a long-term position.
The broader economic backdrop appears stable for now, which supports the current risk-on sentiment. With the CME FedWatch tool indicating a 96% probability of the Fed holding rates steady at its March meeting, a major source of market uncertainty is temporarily off the table. This allows us to focus on company-specific catalysts in the immediate future, with the latest Consumer Price Index reading from January 2026 holding steady around 2.8%.
