Investors expect volatility to remain pronounced around the AI theme, but sentiment improved thanks to the strength of the technology sector.
The shift in mood came overnight after San Francisco-based Anthropic unveiled ten new ways for companies to use its AI plugins, reviving hopes that the technology can boost profits across multiple industries.
AI-linked stocks have experienced weeks of sharp swings amid concerns that heavy capital spending might not translate into short-term profitability.
Market attention is now focused on Nvidia, which will report earnings after the close of Wall Street. According to LSEG, consensus points to a 62% increase in profit for the quarter ending in January and a 68% rise in revenue.
Sergio Ávila, an analyst at IG, notes that Nvidia's figures will be "like a referendum on the AI spending cycle."
"If they beat expectations and provide strong guidance, the message is clear: capex in data centers remains at full throttle and the 'AI trade' still has fuel. If guidance cools, the market will start to wonder whether major clients are diversifying more quickly toward in-house chips or alternatives like AMD," he explains.
"Key things to watch: tone on future demand, comments on competition following the AMD-Meta deal, and potential production bottlenecks," he adds.
On the political front, United States President Donald Trump boasted about stock market gains in his State of the Union address, stating that "almost all" countries and corporations want to maintain the tariff and investment agreements previously signed with Washington.
Trump claimed to have ushered in "the golden age of America" in his Tuesday speech, seeking to project an aura of success despite falling approval ratings and growing voter frustration ahead of the November midterm elections.
Meanwhile, the flow of corporate earnings continued, this time with the release of Iberdrola's figures in Spain, among others.
The utility group rose just 0.1% after announcing that its net profit increased by 12% last year to reach 6.29 billion euros, thanks to the strength of its electricity networks business in the United Kingdom and the United States.
Another key player of the day was Santander, which at its investor day presented a profit target above 23.6 billion dollars for 2028. On the stock market, its shares rose 2.3%, among the top performers on Madrid's blue-chip index.
Overall, the IBEX 35 was up 160.60 points at 0805 GMT, a gain of 0.88%, to 18,350.10 points, while the FTSE Eurofirst 300 index of leading European stocks advanced 0.48%.
In the banking sector, BBVA was up 1.21%, Caixabank gained 1.13%, Sabadell rose 1.20%, Bankinter appreciated by 1.42%, and Unicaja Banco climbed 1.04%.
Among other financial stocks, Telefónica gained 0.22%, Inditex advanced 0.49%, Cellnex fell 0.33%, oil company Repsol lost 0.35%, Naturgy added 0.47%, and Endesa rose 1.84%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
