Oct 29 (Reuters) - U.S. stocks rose to fresh peaks on Wednesday, as Nvidia became the first company to crack $5 trillion in market valuation, while investors awaited a likely rate cut from the Federal Reserve and a wave of results from tech heavyweights.
Shares of Nvidia (NVDA.O), rose 2.2%, storming past the milestone, after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the U.S. government.
The stock has risen more than 50% this year, leading the AI rally on Wall Street. Apple (AAPL.O), and Microsoft (MSFT.O), topped $4 trillion in market cap on Tuesday, also on optimism about AI deals.
Results from Meta (META.O), opens new tab, Microsoft (MSFT.O), and Alphabet (GOOGL.O), could make or break the AI trade that has been a primary driver of the record-breaking U.S. stocks rally.
"Investors expect Nvidia and other tech companies to continue to beat earnings estimates, not only for this quarter but for future quarters. This bull market for tech remains very much intact," said Sam Stovall, chief investment strategist at CFRA Research.
Other than the results, investors are awaiting the U.S. central bank's monetary policy decision at 2:00 p.m. ET. It is widely expected to cut interest rates by a quarter of a percentage point.
After nearly a month of a U.S. government shutdown that has kept key economic data under wraps, investors will hunt for clues on the Fed's rate path after leaning on private surveys and corporate announcements to fill the void.
Traders are expecting another 25 basis point rate cut in December and further easing next year.
Investors will also keep an eye on the central bank's plans to end its "quantitative tightening" policy - a long-running effort to shrink its balance sheet.
At 11:56 a.m., the Dow Jones Industrial Average (.DJI), rose 256.98 points, or 0.54%, to 47,963.35, the S&P 500 (.SPX), gained 13.72 points, or 0.20%, to 6,904.61 and the Nasdaq Composite (.IXIC), gained 123.39 points, or 0.52%, to 23,950.88.
U.S. indexes have hit a series of record highs in recent days, driven by optimism around artificial intelligence, expectations of rate cuts from the U.S. central bank and positive earnings momentum.
Of the 222 companies in the S&P 500 that have reported so far, almost 85% have posted earnings above analyst expectations, according to data compiled by LSEG as of Wednesday. In a typical quarter (since 1994), 67% of companies beat estimates and 20% miss estimates.
Caterpillar (CAT.N), shares jumped nearly 10% on third-quarter profit beat, while Boeing (BA.N), fell 3.8% after the planemaker reported a charge of nearly $5 billion related to delays in its 777X jet program.
Seagate Technology (STX.O), jumped 12.5% after forecasting second-quarter earnings above estimates, lifting peers Western Digital (WDC.O), 12% and SanDisk (SNDK.O), 10.2%. Verizon (VZ.N), rose 3% on beating estimates for profit and subscriber additions. However, some defensive names lagged.
The S&P consumer staples sector (.SPLRCS), fell 1.5% as Kraft Heinz and Cadbury‑maker Mondelez (MDLZ.O), cut profit forecasts, sliding 4.8% and 3.5%, respectively.
Fiserv's shares (FI.N), slumped 39% and were on course for their biggest percentage drop on record, after the company lowered its annual earnings forecasts for the second time.
Meanwhile, U.S. President Donald Trump began the final leg of his Asia trip, saying he had reached a deal with South Korea and was optimistic about an agreement with China's Xi Jinping. Talks between the two counterparts are set for Thursday in the port city of Busan.
Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Additional reporting by Akriti Shah; Editing by Shinjini Ganguli and Krishna Chandra Eluri
