U.S. stocks finished higher Tuesday as technology shares recovered from the previous session’s selloff, Treasury yields declined and investors looked ahead to Nvidia earnings, inflation data and Federal Reserve signals later in the week.
By yourNEWS Media Newsroom.
Wall Street’s major stock indexes ended Tuesday in positive territory as technology shares regained ground and falling oil prices and Treasury yields helped ease pressure on equities following recent volatility in the bond market.
The S&P 500 advanced 23.76 points, or 0.31%, to a preliminary closing level of 7,676.62.
The technology-heavy Nasdaq Composite added 165.28 points, or 0.64%, finishing at 26,145.47, while the Dow Jones Industrial Average gained 155.75 points, or 0.29%, to close at 53,572.91.
The session marked a partial recovery from recent weakness that had been driven in part by a sharp selloff in bonds. Rising yields had weighed on stock valuations, particularly among technology companies whose shares have benefited substantially from expectations surrounding artificial intelligence.
On Tuesday, longer-term Treasury yields moved lower as crude oil prices fell to a one-week low. Investors were also continuing to assess Treasury Secretary Scott Bessent’s decision to expand the Treasury Department’s bond-buyback operations.
Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank, said investors are simultaneously trying to account for several competing forces.
“There’s a lot of push and pull — in the bond market, geopolitics, oil,” Quinlan said.
Despite those uncertainties, he said the longer-term outlook for the American economy and financial markets remains favorable.
“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.”
Tuesday’s advance could alleviate some of the concerns created by the recent bond-market rout and potentially give equities a more positive foundation heading toward September, historically one of the weaker months of the year for stocks.
Technology companies led much of the rebound.
Several of the market’s largest technology stocks closed higher, including Nvidia and Meta, while semiconductor company Micron also gained.
The broader semiconductor index recovered after declining 2.7% Monday.
Advanced Micro Devices rose following an upgrade from Raymond James.
Investor attention is now turning squarely toward Nvidia, which is scheduled to report financial results Wednesday.
The artificial intelligence chipmaker has become one of the central companies in the market’s AI-driven rally, making its earnings and guidance a closely watched indicator of whether enormous spending on artificial intelligence infrastructure continues to support the elevated expectations surrounding the sector.
Any indication that Nvidia’s growth is slowing could revive questions about high technology-sector valuations and how long the current AI investment cycle can continue at its recent pace.
Mark Malek, chief investment officer at Siebert Financial, said Nvidia now faces the challenge that comes with becoming the central beneficiary of a major investment trend.
“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,” Malek said.
Investors have also become increasingly cautious about the cyclical nature of capital spending and the financing methods used by hyperscale technology companies to fund their enormous AI infrastructure projects.
The market’s gains were not limited to technology.
Shares of biotechnology company Moderna surged after Barclays raised its price target for the stock.
The increase in Barclays’ target price Monday followed the release several days earlier of late-stage clinical trial results involving a skin cancer vaccine jointly developed by Moderna and Merck.
Other parts of the market experienced significant losses.
Dick’s Sporting Goods shares plunged after the retailer reduced its annual forecasts, while sportswear company Nike also declined.
Target shares fell after the retailer apologized for and withdrew a Halloween costume that drew criticism for appearing to evoke blackface.
The incident renewed concerns over potential brand-management problems at Target just as the retailer’s effort to improve its financial performance had begun showing signs of progress.
Investors are also preparing for another important set of economic indicators that could affect expectations for interest rates.
Wednesday’s Personal Consumption Expenditures report is expected to provide additional information about inflationary pressures in the U.S. economy.
An earlier consumer inflation report this month came in broadly in line with expectations and reduced market expectations for an immediate interest-rate increase by the Federal Reserve.
Even so, money markets continue to price in one 25-basis-point rate increase before the end of the year, according to LSEG data.
Fresh evidence Tuesday also indicated that consumers remain cautious about the economic outlook.
A survey showed U.S. consumer confidence declined in August to its weakest reading in seven months.
Market participants will then turn their attention to Federal Reserve Chair Kevin Warsh, who is scheduled to speak Friday in Jackson Hole, Wyoming.
Investors will closely examine Warsh’s remarks for indications of how the central bank is interpreting inflation, economic growth and financial conditions and what those factors could mean for future monetary policy.
The combination of Nvidia’s earnings, the PCE inflation report and Warsh’s Jackson Hole address gives investors several potentially significant catalysts before the end of the week.
For Tuesday, however, the combination of recovering technology shares, lower oil prices and easing Treasury yields was enough to push all three major U.S. stock indexes higher and provide some relief after the recent pressure from the bond market.
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