Wall Street closed higher on Tuesday as technology stocks recovered from a recent selloff ahead of Nvidia's earnings, with the Nasdaq Composite outpacing the Dow and the S&P 500. Falling oil prices and bond yields added support, while investors turned to Wednesday's inflation data and Nvidia's results as the next tests for the rally.
The Nasdaq Composite gained 171.11 points, or 0.66%, to close at 26,151.30 on Tuesday, outpacing the Dow Jones Industrial Average and the S&P 500 as technology shares rebounded. The Dow rose 160.24 points, or 0.30%, to 53,577.40, while the S&P 500 added 24.38 points, or 0.32%, to 7,677.24.
Chipmakers rebound ahead of Nvidia earnings
Most megacap stocks closed higher. Nvidia rose 2.2% and Meta climbed almost 2%, while Micron gained 2.5% and the broader chips index ended 1.4% higher after a 2.7% fall on Monday. Advanced Micro Devices rose 4.9% after Raymond James upgraded the stock.
Nvidia's results on Wednesday will be the next test for the earnings-driven rally. Any signs of slowing growth could reignite concerns about stretched valuations and how long the AI boom can sustain them. As Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank, put it: "There's a lot of push and pull — in the bond market, geopolitics, oil."
Yields and oil ease pressure on stocks
Longer-dated Treasury yields fell on Tuesday as oil prices dropped to a one-week low, with traders also weighing Treasury Secretary Scott Bessent's decision to expand Treasury buybacks. The gains could ease investor concerns sparked by a recent bond market rout that lifted yields and pressured equities.
Elsewhere, Dick's Sporting Goods plunged 30.7% after the retailer cut its annual forecasts. Target shares fell 3.8% after the retailer apologized for and pulled a Halloween costume criticized for evoking blackface.
Inflation data and Fed speech loom
The Personal Consumption Expenditures report on Wednesday could offer clarity on inflation pressures after an in-line consumer inflation reading this month tempered bets on an imminent interest-rate hike. A survey showed U.S. consumer confidence fell in August to its lowest in seven months. Still, money market participants are pricing in one 25-basis-point rate increase by the end of the year, according to LSEG data.
Investors will now watch Fed Chair Kevin Warsh's Jackson Hole speech on Friday for clues on the central bank's approach to monetary policy.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
