The war in Iran is setting the tone for the stock market again. Every major index opened Wednesday's session with a downswing, as the military conflict intensified. But after bottoming out around 9:45 a.m. ET, the market mood lightened and the leading index names have been up by at least 0.6% since mid-morning:
Big tech to the rescue
Tech stocks led the recovery rally. Chip designer Nvidia (NVDA 1.45%) is up by 2.2% as of 2:40 p.m. ET, as Amazon (AMZN 1.43%) gained 3.9% and Meta Platforms (META 2.41%) saw a 2.2% gain. As a result, the tech-heavy Nasdaq Composite (^IXIC 1.52%) index led the index gains with a 1.7% increase.
The trillion-dollar giants had a milder impact on the price-weighted Dow Jones Industrial Average (^DJI 1.37%), and the highest-priced shares in this classic 30-name index chiefly gained 1% or less.
In the middle of the pack, the S&P 500 (^GSPC 1.26%) showed a 1% afternoon gain from its more diversified selection of 503 stocks.
NASDAQINDEX: ^IXIC
Key Data Points
Is this a real rally or just a breather?
This bounce isn't a victory rally. Nvidia's stock is still down 6% over the last week while Meta and Amazon are up by just 3% in the same period. All three stocks are trading double-digit percentages below their 52-week highs. Some investors are concerned that the AI boom is losing momentum; others expect the same AI tools to kill traditional software development and other industries.
It's not surprising that market indexes have been volatile in this unpredictable setting. From military conflicts and international tensions to surprising tariffs and unexpected revisions to economic data, Wall Street is rife with market-moving disruptions these days.
And the tech stock gains on Wednesday make sense in this light. Tech investors are craving signs of stability and a return to normal operations, which has included historic stock returns in the ongoing AI boom. A simple lack of obviously bad news can leave some breathing space in this stressful economy.
