!["AI Wave Separating Wheat from Chaff" New York Stock Market Closes Higher [Daily International Finance] - Seoul Economic Daily International News from South Korea](/_next/image?url=https%3A%2F%2Fwimg.sedaily.com%2Fnews%2Fcms%2F2026%2F02%2F26%2Fnews-p.v1.20260226.e5d7692ac9474ec1a38dbaf02aadfaef_P1.jpg&w=3840&q=75 "Wall Street Rallies on Nvidia Earnings Optimism")
Wall Street closed higher as investors priced in expectations for Nvidia's earnings results. Analysts say concerns over "AI disruption"—the fear that artificial intelligence could replace entire industries, particularly in software—are fading as investors become more selective in their approach.
On February 25, the Dow Jones Industrial Average rose 0.63% to close at 49,482.27, while the S&P 500 gained 0.81% to finish at 6,946.14. The Nasdaq Composite jumped 1.26% to end at 23,152.08.
Nvidia shares climbed 1.43% ahead of the company's earnings release scheduled after market close, boosting overall investor sentiment.
"Solid results and, more importantly, strong guidance would reaffirm the positive AI thesis," said Louis Navellier, Chief Investment Officer at Navellier & Associates. "However, any hint of caution could trigger significant volatility."
Solita Marcelli, Chief Investment Officer for the Americas at UBS, noted that "whether market confidence can be sustained depends partly on Nvidia's results." She added that "with hyperscalers announcing expanded capital expenditure plans in recent weeks, markets expect Nvidia to project revenue exceeding consensus estimates alongside strong revenue growth."
The software sector advanced for a second consecutive session. The iShares Expanded Tech-Software Sector ETF (IGV) rose 2%.
"Concerns that have plagued investors around AI and software have been somewhat exaggerated," said Michael Rosen, Chief Investment Officer at Angeles Investment Advisors. "The market is moving away from lumping everything into one category and toward carefully assessing which companies are better positioned than others."
He added: "The market that used to sell first and ask questions later has now entered the phase of asking questions."
Markets are also monitoring tensions between the United States and Iran. In his State of the Union address the previous day, President Donald Trump left open the possibility of a diplomatic resolution with Iran while also stating that Iran is building missiles capable of striking the United States.