US open: Chip stocks lead markets higher, though upside limited

(Sharecast News) - US stocks opened Wednesday's session mostly higher, led by strong gains in the tech sector after the Trump administration lifted curbs on AI chip exports, though upside was limited after the recent rally.

By 1004 ET, the Dow and S&P 500 were rising 0.1% each, while the Nasdaq pushed 0.3% ahead.

The S&P 500 and Nasdaq have gained around 4% and 6% over the past two sessions alone, respectively, with both indices trading at levels not seen since late February.

Sentiment has been lifted by the weekend agreement between the US and China to temporarily lower tariffs as they continue trade negotiations, while US inflation figures for April came in lower than expected.

"Despite [the subdued start], investors appear to have regained their mojo with the prevailing sentiment suggesting that it's safe to be bullish once again," said David Morrison, senior market analyst at Trade Nation.

"Yet all the US majors have rallied sharply off the oversold levels which marked last month's slump. Prices may need to consolidate now, or even pull back from current levels, to provide a base for further gains."

The only major economic data release was as report from the Mortgage Bankers Association before the opening bell, which showed that US mortgage applications edged 1.1% higher in the week ended 9 May, following an 11% surge the previous week.

Market movers

Chip giant Nvidia was extending recent gains after the Department of Commerce said it was scrapping the so-called 'AI Diffusion Rule', which imposed restrictions on AI chip exports to certain countries.

With shipment caps now curbed, Nvidia and sector peer AMD were able to strike agreements with Saudi Arabia's state-backed Humain to supply chips for its AI data centres. The deals saw Bank of America raise its target prices for both stocks.

Similarly, server and storage systems group Super Micro Computer surged more than 12% after announcing a deal with Saudi group DataVolt worth $20bn. The deal will see SMC provide "ultra-dense GPU platforms and rack systems" for DataVolt's AI campuses in Saudi Arabia and the US.

US-listed shares of Chinese ecommerce giant JD.com fell despite beating forecasts with first-quarter sales and profits.