Wall Street’s main indexes closed more than 1% higher on May 20, as investors bought technology and chip stocks ahead of Nvidia’s quarterly results and shook off a three-day selloff tied to Middle East tensions.
The Dow Jones Industrial Average rose 398.33 points, or 1.08%, to 26,269.04. The S&P 500 gained 79.06 points, or 1.54%, to 7,432.67 points, and the Nasdaq Composite added 647.44 points, or 1.31%, to 50,011.32. The Philadelphia SE Semiconductor index rallied sharply, with Astera Labs and ARM Holdings among the big gainers, as traders positioned for a report from Nvidia, the leading artificial intelligence chipmaker and the world’s most highly valued company. “Technology is driving the bus again today, and the AI theme,” said Carol Schleif, adding that the market had “swapped back from yesterday’s concerns about rising rates and potential inflation and are leaning more into the all-things-AI story.”
That shift mattered because investors were looking to Nvidia’s latest results for reassurance that AI spending is still strong enough to justify rich technology valuations. Schleif also said it was “a little bit unusual” for the market to be this active before the report, though she added that “there’s clearly a lot of optimism.”
The rebound came after three straight sessions of losses, when the lack of a resolution to the U.S.-Israeli war on Iran pushed U.S. indexes lower on worries that oil prices and inflation could rise. On Wednesday, Iran’s foreign ministry spokesperson said the exchange of messages between Iran and the U.S. had continued, while President Donald Trump said negotiations with Iran were in the final stages and that the U.S. may have to attack Iran even harder but would wait to see if a deal could be reached.
Markets also drew support from Treasury and Federal Reserve developments. The benchmark 10-year Treasury yield eased after rising for three straight days and touching a 16-month high, and stocks added to gains after the Federal Reserve released minutes from its last meeting. The minutes showed more officials saying the central bank should lay the groundwork for a possible rate hike, but the odds of a December move dipped to 36.8% from 42% a day earlier, according to CME Group’s FedWatch tool.
Among the 11 major S&P 500 sectors, consumer discretionary and technology were the biggest gainers. Energy fell with oil prices, while consumer staples slipped under pressure from Target, whose shares declined after the retailer warned of a challenging macroeconomic backdrop even as it doubled its annual sales growth forecast.
For now, the session showed how quickly traders can pivot back to the AI trade when they think Nvidia may validate it. The next move depends less on the day’s rally than on whether Nvidia can deliver the reassurance investors are demanding.
