Stocks generally rose as a decline in oil prices led to lower bond yields. Traders are keenly awaiting Nvidia Corp.'s earnings report to assess the ongoing strength of the artificial intelligence outlook. The Nasdaq 100 outperformed other major benchmarks, showing a rebound in chipmakers and halting a seven-day losing streak for Nvidia. Brent crude settled below $90, fueled by hopes for renewed energy flows through the Strait of Hormuz and easing concerns about Middle East geopolitical tensions following reports of the US returning diplomats to embassies.
Lower oil prices also alleviated worries about inflationary pressures, benefiting Treasuries. The yield on 10-year Treasuries declined by seven basis points to 4.63%. In commodity markets, West Texas Intermediate crude fell 4.6% to $81.08 a barrel, while spot gold rose 0.3% to $4,666.70 an ounce. This economic backdrop is setting the stage for Wednesday's release of the Federal Reserve’s preferred inflation gauge.
Market participants are also anticipating a speech by Fed Chair Kevin Warsh on Friday, especially given prior market reactions to his communications. Analysts like Matt Maley at Miller Tabak suggest Warsh will likely maintain his stance, making Nvidia's earnings crucial for market direction. Analysts estimate Nvidia's revenue nearly doubled last quarter to $92 billion, far exceeding rivals' annual revenues. Mark Malek at Siebert Financial highlighted that while good news is expected from Nvidia, any misstep could present a significant challenge, or an opportunity for investors. Kenny Polcari at SlateStone Wealth emphasized that investors are looking for continued strong AI demand, sustained hyperscaler spending, healthy margins, and guidance that justifies high ongoing investments.
US consumer confidence reached its lowest level since the beginning of the year, attributed to a deteriorating outlook for business conditions and jobs. Despite this, the S&P 500 rose 0.3%, the Nasdaq 100 climbed 0.6%, and the Dow Jones Industrial Average also saw a 0.3% increase. MSCI's World Index advanced 0.4%. The overall market sentiment was influenced by the declining oil prices, which helped to ease bond market worries and support stock prices, as noted by AP News.
