Wall Street advanced modestly on Tuesday as technology stocks rebounded from a recent selloff, while investors monitored falling oil prices and Treasury yields ahead of key inflation data and earnings from artificial intelligence heavyweight Nvidia.
Major U.S. stock indexes closed higher on Tuesday, pulling back from earlier pressure as technology stocks recovered ahead of high-stakes corporate results and economic reports. Market participants found relief in lower oil prices and easing bond yields, which helped soothe anxieties stemming from a recent bond market rout that had pushed yields higher and weighed on equities. The gains could also help set the tone for September, a historically weaker month for stocks.
Technology Rebound Lifts Wall Street Indexes
The Dow Jones Industrial Average rose 160.24 points, or 0.30%, to 53,577.40, according to Reuters market data. The S&P 500 gained 24.38 points, or 0.32%, to finish at 7,677.24, while the Nasdaq Composite added 171.11 points, or 0.66%, ending the session at 26,151.30. Robinhood (HOOD) and Interactive Brokers (IBKR) also flashed buy signals, Investor’s Business Daily reported. Dow Jones futures edged higher overnight, while S&P 500 futures and Nasdaq futures fell slightly.
Most megacap companies finished the day in positive territory. Nvidia shares rose 2.2%, Meta (META.O) climbed almost 2%, and chipmaker Micron (MU.O) gained 2.5%. The broader chips index (.SOX) ended 1.4% higher after a 2.7% fall on Monday. Advanced Micro Devices (AMD.O) rose 4.9% following an upgrade from Raymond James. Meanwhile, shares of biotechnology firm Moderna (MRNA.O) surged 14% after Barclays hiked its target price. The target price increase on Monday came days after Moderna and Merck (MRK.N) reported late-stage trial results for their jointly developed skin cancer vaccine.
On the other hand, Dick’s Sporting Goods (DKS.N) plunged 30.7% after the retailer cut its annual forecasts, and sportswear company Nike (NKE.N) dipped. Target (TGT.N) shares fell 3.8% after the retailer apologized for and pulled a Halloween costume criticized for evoking blackface, renewing concerns about brand missteps just as its financial turnaround effort had begun to gain traction.
Nvidia Earnings and Market Sentiment
Wednesday’s upcoming financial results from Nvidia (NVDA.O) will serve as a crucial barometer for the ongoing earnings-driven rally and broader sentiment surrounding artificial intelligence infrastructure. Nvidia, CrowdStrike and Salesforce loom Wednesday night. Any signs of slowing growth could reignite concerns about stretched valuations and how long the AI boom can sustain them.
This is the classic problem of being the epicenter of the buildout — when you are the trade, execution stops being a catalyst and becomes a prerequisite.
Mark Malek, chief investment officer at Siebert Financial
At the same time, markets have grown wary of cyclical spending and the methods hyperscalers are using to fund their AI buildouts.
Weighing Bond Yields, Oil Prices, and Inflation Data
Longer-dated Treasury yields fell on Tuesday as oil prices dropped to a one-week low, and traders continued to weigh the implications of Treasury Secretary Scott Bessent’s decision to expand Treasury buybacks.
Market observers pointed to shifting economic currents. There's a lot of push and pull — in the bond market, geopolitics, oil,
said Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank, adding, But we're pretty constructive on the outlook (for the) next 12, 18 months on the U.S. economy; therefore, we are constructive on the markets as well.
Upcoming macroeconomic releases, including the Personal Consumption Expenditures report on Wednesday, are expected to provide greater clarity on price pressures after an in-line consumer inflation reading this month tempered bets on an imminent interest-rate hike by the U.S. Federal Reserve. The Federal Reserve’s favorite gauge, core PCE inflation, will be released before the open. Still, money market participants are pricing in one 25-basis-point rate increase by the end of the year, according to LSEG data. Against this backdrop, investors will watch Fed Chair Kevin Warsh’s Jackson Hole, Wyoming, speech on Friday for clues on the central bank’s approach to monetary policy. On Tuesday, a survey showed U.S. consumer confidence fell in August to its lowest in seven months.
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