(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

Indexes up: Dow 0.41%, S&P 500 0.61%, Nasdaq 1.1%

*

Axon surges after Q4 results beat

*

First Solar ( FSLR ) slides on weak annual sales forecast

(Updates after markets open)

By Shashwat Chauhan and Ragini Mathur

Feb 25 (Reuters) - The S&P 500 and the ​Nasdaq hit

two-week highs on Wednesday as technology stocks remained in

favor while investors ‌weighed risks to the AI trade and mounting

tariff uncertainties ahead of Nvidia's ( NVDA ) 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 ( NVDA ) 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 ( NVDA ) 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 ( NVDA ) 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 09:52 a.m. ⁠ET, the Dow Jones Industrial Average

rose 199.66 points, or 0.41%, to 49,374.16, the S&P 500

gained 41.42 points, or 0.61%, to 6,931.95 and the Nasdaq

Composite gained 250.74 points, or 1.10%, to 23,114.42.

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 ( AXON ) 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.

Shares of GoDaddy ( GDDY ) tumbled 15.8% after the internet

services provider ​forecast annual revenue below Wall Street

expectations.

First Solar ( FSLR ) 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.