AI Optimism Drives Stock Market to New Heights

Major stock indexes hit record highs as Nvidia's earnings loom large despite concerns over Fed independence. AI-driven growth in tech stocks has propelled the market, though some caution emerges. Meanwhile, political risks in France and a potential U.S. interest rate cut influence global financial dynamics.

Major U.S. stock indexes soared on Wednesday, with the S&P 500 reaching a historic peak ahead of Nvidia's quarterly earnings report. Investors remain optimistic about the artificial intelligence sector, which has significantly boosted equity indexes despite concerns about the Federal Reserve's independence.

The dollar edged slightly higher after a recent dip, while two-year U.S. Treasury yields fell to a near four-month low. This comes as President Donald Trump hinted at making more dovish appointments to the Fed, sparking anxiety about the central bank's autonomy.

Nvidia's forecast of better-than-expected third-quarter revenue was overshadowed by a 3% fall in its shares post-market. As tech stocks face scrutiny, European markets eye political developments in France, with Fed Chair Jerome Powell's recent comments hinting at possible interest rate cuts.

(With inputs from agencies.)