U.S. stocks surged on the open on Thursday with the Dow and S&P 500 eyeing fresh records after Nvidia Corp.’s blowout earnings unleashed a wave of optimism that drove global markets higher.

How are stocks trading

• The S&P 500
  SPX
  rose 60 points, or 1.2% to five,042.

• The Dow Jones Industrial Average
  DJIA
  added 228 points, or 0.6%, to 38,874.

• The Nasdaq Composite
  COMP
  surged 305 points, or 2%, to fifteen,897.

On Wednesday, the S&P 500 and Dow eked out gains to avoid a 3rd day within the red, while the Nasdaq Composite wasn’t so lucky. Nonetheless, all three U.S. benchmarks looked set to erase losses from earlier within the week on Thursday.

What’s driving markets

Wall Street had seen timid trading firstly of the week as many investors feared the equity rally which took the S&P 500 index to a record close of 5029.73 last Friday was vulnerable should earnings from mega-tech AI-darling Nvidia
NVDA,
+14.24%
disappoint.

They need to have had more faith.

After the close on Wednesday, the chipmaker, which by then was back down from third to fifth biggest U.S. company by market cap, delivered revenues, profits and forecasts that beat analysts already elevated expectations.

The news has sparked a world risk-on surge, which helped propel Japan’s and Europe’s benchmark equity barometers to recent record levels, while leaving several U.S. benchmarks set to open in record territory, with the S&P 500 and Dow on course to log fresh closing highs.

“The massive fear in recent days was that a disappointing quarter from Nvidia would result in a lack of investor confidence within the tech space and that might cause contagion on the markets,” said Russ Mould, investment director at AJ Bell.

“Crisis has been averted after Nvidia smashed expectations with its latest results…a big beat on each earnings and sales has put a recent rocket under the stock,” Mould added.

Nvidia shares were up greater than 14% in premarket trading, dragging stocks resembling Arm Holdings
ARM,
+10.37%
up 10% and Super Micro Computer
SMCI,
+19.45%
up 15%, in its wake.

Now that this hurdle has been cleared, analysts expect the rally in U.S. stocks to proceed.

“So, there you go, ladies and gentlemen, a possible misstep from Nvidia that might hammer the AI rally has simply not come. What now? The rally will probably proceed,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Julian Emanuel, strategist at Evercore ISI summed up the mood simply: “FOMO stays bid.”

See: Stocks can get dearer, says strategist. Don’t get in front of FOMO for now.

There are other corporations reporting results. Moderna
MRNA,
+6.45%,
Newmont
NEM,
-4.10%
and Wayfair
W,
+6.50%
released earnings ahead of Thursday’s opening bell. Carvana
CVNA,
+1.98%,
Intuit
INTU,
+2.81%
and Live Nation Entertainment
LYV,
+0.98%
will present after the close.

U.S. economic updates on Thursday included the most recent reading on weekly jobless claims, which fell to a five-week low at 201,000. Later, S&P flash services and manufacturing PMIs for February are due at 9:45 a.m., and January existing home sales at 10 a.m.

Quite a lot of Federal Reserve officials are because of speak Thursday, because the 10-year Treasury yield
BX:TMUBMUSD10Y
trades off 1.3 basis points to 4.307%, near the highest of its 12-week range. Fed Vice Chair Philip Jefferson makes comments at 10 a.m., Philadelphia Fed President Patrick Harker talks at 3:15 p.m., Fed Gov. Lisa Cook and Minneapolis Fed President Neel Kashkari each speak at 5 p.m.