The S&P 500 and the Nasdaq hit two-week highs Wednesday as technology stocks remained in favor while investors weighed risks to the AI trade and mounting tariff uncertainties ahead of Nvidia's earnings due later in the day.

February has been a choppy month for U.S. equities as investors questioned if massive AI spending touted by technology giants was actually paying off.

Several sectors ranging from software, commercial real estate to trucking and logistics have recently logged steep declines, as new developments in the AI space stoked worries of industry-wide disruptions.

"I see AI disruption continuing as a dominant market theme through this year because AI continues to evolve," said Sam Stovall, CFRA's chief investment strategist.

"We are still looking at elevated valuations in the market and there will still be an unwind not only in technology and software in particular, but in other areas as well."

All eyes will be on Nvidia's earnings due after markets close on Wednesday, with AI investors seeking evidence that the chipmaker's profits are growing on the back of Big Tech's $630 billion capital spending budget for 2026.

Nvidia options imply a move of about 5.6% in either direction a day after the company reports results, which is the lowest expected post-results swing ahead of any Nvidia report in at least three years.

Its shares were trading 1.6% higher, while the Philadelphia SE Semiconductor Index climbed to a record high.

At 11:00 a.m. EST, the Dow Jones Industrial Average rose 124.56 points, or 0.25%, to 49,299.06, the S&P 500 gained 34.83 points, or 0.51%, to 6,924.90, and the Nasdaq Composite gained 212.93 points, or 0.93%, to 23,077.28.

The S&P 500 information technology index rose 1.6%, while the communication services index added 1%. Financials also added 0.6%.

Technology stocks were building on their gains from Tuesday, when the Nasdaq gained more than 1% as sentiment towards AI stocks improved.

U.S. President Donald Trump boasted of stock market gains in his State of the Union speech on Tuesday and said that "almost all" countries and corporations want to stick to tariff and investment agreements previously made with the United States.

Trump's temporary global tariff of 10% came into effect on Tuesday after the Supreme Court's sweeping ruling last week. He later said the levy would be 15%, but it was unclear when and if it would apply.

In earnings-related moves, Axon Enterprise climbed 19.6% after the taser-maker beat fourth-quarter profit estimates, while Workday dropped 4% after the enterprise software maker forecast fiscal 2027 subscription revenue below estimates.

Lowe's Companies shares fell 4.2% after the home improvement retailer forecast annual sales and profit below estimates.</p> <p>Shares of GoDaddy tumbled 15.8% after the internet services provider forecast annual revenue below Wall Street expectations.

First Solar shed 12.9% after the solar panel maker projected annual sales below estimates.

Advancing issues outnumbered decliners by a 1.28-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq. The S&P 500 posted 40 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 85 new highs and 53 new lows.