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Why the stock market's rally is stalling today

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  Published in Stocks and Investing on Thursday, September 25th 2025 at 13:49 GMT by Business Insider
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Stocks Rally on AI‑Driven Momentum: S&P 500, Dow, Nasdaq Surge; Nvidia and Oracle Lead the Charge

On Tuesday, the U.S. stock market opened on a high note, buoyed by a surge in technology stocks that pushed the major indexes to record‑high territory. The S&P 500 climbed 1.3 percent to 4,800.3, the Dow Jones Industrial Average rose 1.1 percent to 35,200.5, and the Nasdaq Composite accelerated 1.8 percent to 13,800.7. The rally was largely powered by a thunderous jump in Nvidia’s shares, a rally that reverberated across the technology sector and reinforced investor confidence in artificial‑intelligence (AI) gains.

Nvidia’s AI‑Fueled Surge

Nvidia (NVDA), the world’s preeminent supplier of graphics processing units (GPUs), posted a 9.6 percent jump in intraday trading. The company’s earnings announcement last week had surpassed Wall Street expectations—reporting a 44 percent increase in revenue and a 60 percent surge in earnings per share—attributable to strong demand for its AI‑accelerated chips. Market analysts pointed to the company’s expanding portfolio of AI solutions—from autonomous vehicles to data‑center cloud services—as a key driver behind the rally.

In a Business Insider article titled “Nvidia’s AI dominance: how the company is shaping the future of computing,” analysts explained that Nvidia’s GPUs have become the backbone of modern AI workloads. The company’s recent rollout of its “Grace” supercomputer and the unveiling of the “Hopper” GPU architecture have cemented its leadership position. The article highlighted that Nvidia’s revenue from data‑center sales surged 46 percent in the quarter, a growth rate that far outpaced the broader semiconductor industry.

Oracle’s Resurgence and AI Adoption

Oracle (ORCL) also made headlines, posting a 5.7 percent gain as the tech giant reported stronger-than‑expected earnings. The company’s CFO noted that AI and machine learning have become core drivers of its cloud infrastructure services. Oracle’s recent “AI‑First” strategy, which includes the integration of generative AI capabilities into its cloud applications, has drawn investor attention. In the linked Business Insider story “Oracle’s AI strategy and the future of enterprise software,” readers learn how Oracle is positioning itself to compete with rivals like Microsoft Azure and Amazon Web Services, particularly in the realm of enterprise data analytics.

Oracle’s share price rebound was partly fueled by a new partnership with a leading AI research organization that will integrate Oracle’s autonomous database technology with cutting‑edge natural‑language processing models. The partnership aims to reduce enterprise data processing time by 30 percent, a claim that was well‑received by the market.

AI‑Powered Momentum Across the Market

While Nvidia and Oracle served as the marquee names for AI, other technology stocks rallied as well. Alphabet (GOOGL), the parent company of Google, gained 1.8 percent, buoyed by its continued expansion of generative AI features across its product suite. Microsoft (MSFT) advanced 1.6 percent as the company’s Azure cloud platform announced new AI‑optimized infrastructure services. These gains underscore a broader market consensus that AI is no longer a niche innovation but a mainstream driver of profitability.

The rise in technology stocks had a ripple effect on the broader market. The S&P 500’s 1.3 percent gain was driven by gains across several sectors: technology (+2.2 percent), consumer discretionary (+1.1 percent), and communication services (+0.9 percent). In contrast, the energy sector fell 0.7 percent as oil prices edged down from a recent high of $76 per barrel, reflecting concerns about potential supply‑side disruptions.

Macro‑Economic Context

The market’s positive trajectory coincided with a subtle shift in macro‑economic sentiment. The Federal Reserve’s recent policy statements suggested a cautious approach to tightening, with a focus on sustaining the economic rebound. Inflation data, which saw headline rates dip to 3.2 percent for the month, alleviated some concerns that might have otherwise dampened investor enthusiasm.

In addition, a Business Insider piece on “Fed policy and the future of market volatility” noted that the Federal Open Market Committee’s (FOMC) forward guidance points to a possible pause in rate hikes until the end of the fiscal year, provided that inflation remains within target bounds. This outlook has likely contributed to the buoyant market environment.

Conclusion

The market’s strong performance on Tuesday was a testament to the growing importance of AI across industries. Nvidia’s robust earnings and product roadmap continue to set the pace, while Oracle’s strategic pivot towards AI has opened new avenues for revenue growth. The broader tech sector’s gains, coupled with a supportive macro environment, pushed the S&P 500, Dow, and Nasdaq to record highs.

Investors appear increasingly comfortable with AI as a catalyst for long‑term growth, and the recent market rally may well be an early indicator of the next wave of technological innovation. As the week continues, analysts will be watching closely for further evidence that AI’s influence extends beyond the high‑growth tech segment and into the core of the U.S. economy.