Stocks generally rose as a decline in oil prices led to lower bond yields, with market participants eagerly anticipating Nvidia Corp.'s earnings report to gauge the continued strength of the artificial intelligence sector. A rebound in chipmakers, including Nvidia, ended a seven-day losing streak for the company ahead of its results, and the Nasdaq 100 outperformed other major benchmarks. Brent crude settled below $90, spurred by hopes for renewed energy flows through the Strait of Hormuz following discussions between Iran and Oman, and a news report about the US returning diplomats to Middle East embassies further helped ease concerns about escalating conflict.
The drop in oil prices also alleviated inflationary pressures, boosting Treasuries. The yield on 10-year Treasuries declined seven basis points to 4.63%, Germany's 10-year yield fell five basis points to 3.20%, and Britain's 10-year yield decreased seven basis points to 4.99%. West Texas Intermediate crude fell 4.6% to $81.08 a barrel, while spot gold rose 0.3% to $4,666.70 an ounce.
Analysts are keenly focused on Nvidia's earnings, with estimates suggesting revenue nearly doubled last quarter to $92 billion, exceeding the annual revenue of many rivals. Kenny Polcari at SlateStone Wealth noted that investors are looking for confirmation of strong AI demand, sustained hyperscaler spending, healthy margins, and guidance that justifies ongoing significant investment. Mark Malek at Siebert Financial emphasized that while expectations are high, any misstep by Nvidia could present a challenge but also an opportunity for investors. Meanwhile, a speech by Fed Chair Kevin Warsh is expected, with analysts like Matt Maley of Miller Tabak suggesting he will likely maintain his stance despite pressure for more flexible communication, making Nvidia's positive earnings reaction even more crucial compared to other chip stocks this earnings season.
The S&P 500 rose 0.3%, the Nasdaq 100 increased 0.6%, and the Dow Jones Industrial Average gained 0.3% as of 4 p.m. New York time. The MSCI World Index also rose 0.4%. Conversely, Asian shares showed mixed performance, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.1%, Japan's Nikkei up 0.3%, and South Korea's Kospi down 0.2%. China's CSI300 declined 0.2%, and Hong Kong's Hang Seng Index eased 0.3%. Concerns over Alibaba's $10.2 billion share sale at a discount for AI funding and Samsung Electronics' shareholder-return plan partially weighed on tech sentiment in Asia.
