The Dow Jones Industrial Average slipped 0.13%, while the S&P 500 gained 0.38% and the Nasdaq climbed 0.96% in early trading.

Shares of NVIDIA (NVDA) surged 6.92% after the company reported second-quarter earnings for fiscal 2027 and issued a robust revenue growth outlook. Notably, the chipmaker projects 70% revenue growth for fiscal 2028, significantly surpassing the 44% consensus estimate from Refinitiv-surveyed analysts. Its second-quarter revenue more than doubled year-over-year. This strong performance could help NVIDIA break the recent pattern of beating earnings estimates only to see its stock decline.

A team led by Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, noted in a Thursday morning research note: "We continue to favor the overall AI growth narrative, viewing it as a core driver of our bullish market stance." The team added: "Despite ongoing concerns about the sustainability of AI capital expenditures and the risk of circular financing in some AI deals, which may periodically cause volatility in the tech sector, the second-quarter earnings season shows that industry fundamentals remain solid."

Across the broader market, semiconductor stocks rallied in pre-market trading: Marvell Technology (MRVL) gained nearly 4%, while Micron Technology (MU) and Arm Holdings (ARM) each rose more than 3%. Salesforce.com (CRM) jumped 10% after reporting better-than-expected second-quarter revenue. Identity security provider Okta (OKTA) soared over 17% following its earnings beat, fueled by strong demand driven by agentic AI technologies.

Adding to the tech sector's renewed optimism, Kioxia Holdings and SanDisk announced a $31 billion joint venture to expand flash memory production capacity, addressing AI-driven storage demands. NVIDIA's optimistic outlook also helped ease investor concerns about a potential AI bubble. CEO Jensen Huang stated that demand for AI accelerators used in model training and inference continues to expand.

Geoff Yu of BNY remarked: "Earnings growth from core tech companies is critical because it's the primary driver of the U.S. market, and tech investment is also a major engine for U.S. economic growth." He cautioned, however: "Strong growth also carries the risk of tighter monetary policy, and the current market base case still assumes interest rates may remain relatively high."

Amanda Lyons, Head of Research at Energy Group Capital, noted that NVIDIA's earnings show the current AI cycle is constrained primarily by physical infrastructure bottlenecks—such as memory and power—rather than insufficient end demand. She said: "This effectively pushes concerns about the AI cycle further down the road, and more importantly, it gives investors reason to extend earnings growth expectations, not just for NVIDIA but also for second- and third-tier beneficiaries across the AI infrastructure buildout."

Beyond the wave of earnings releases, traders awaited the Federal Reserve's annual symposium in Jackson Hole, Wyoming, which kicks off Thursday. In Asia-Pacific markets, Japan's Nikkei 225 closed down 0.20%, South Korea's KOSPI rose 1.53%, Australia's S&P/ASX 200 fell 0.98%, and China's CSI 300 gained 0.86%. European stocks traded mostly lower Thursday morning, though the tech sector rose 1.5%, with European semiconductor names rallying on the back of NVIDIA's earnings.

However, some weak market factors tempered Thursday's optimism. U.S. Treasuries slipped slightly, with the 10-year yield rising 2 basis points to 4.67%. Markets are awaiting remarks from Fed Chairman Kevin Warsh on Friday in Jackson Hole for further clues on the U.S. rate path. In the eurozone, German bond yields edged up 0.7 basis points to 3.229%, as rising natural gas prices intensified inflation concerns.

The U.S. dollar held near its one-week high, with the dollar index, which measures the currency against six major peers, staying close to recent highs. This followed U.S. Personal Consumption Expenditures (PCE) data showing July prices rose 0.2% month-over-month, after a 0.1% decline in the prior month. Jim Reid, Global Head of Macro Research at Deutsche Bank, said: "While July core PCE inflation met market expectations, the details actually lean toward inflationary pressure." He added that the strong economic momentum reflected in durable goods orders and GDP data makes it difficult to reconcile with the view that monetary policy remains restrictive.

The yen moved little after Bank of Japan Deputy Governor Ryozo Himino said the central bank would continue to monitor inflation risks, with markets increasingly expecting a rate hike in September. Brent crude futures fell 1.1% to $86.8 per barrel, heading for a fourth consecutive daily decline. Meanwhile, Qatar's Prime Minister is set to visit Tehran on Thursday in an attempt to revive peace talks between the U.S. and Iran. Westpac analysts noted: "Despite persistent high uncertainty over the management of the Strait of Hormuz and global oil supply conditions, crude prices are gradually retreating, especially amid renewed threats from Russian President Vladimir Putin to escalate the Russia-Ukraine conflict."