Stocks generally rose, with the Nasdaq 100 outperforming other major benchmarks, as traders anticipated Nvidia Corp.'s earnings report for insights into the future of artificial intelligence. A rebound in chipmakers helped halt a seven-day losing streak for Nvidia. Brent crude settled below $90 a barrel due to discussions between Iran and Oman regarding an interim framework for energy flows through the Strait of Hormuz.
Following Nvidia's earnings release, Wall Street stocks wavered as bond prices fell, reflecting investor concerns about potential interest rate hikes by the Federal Reserve later in the year. The S&P 500's exchange-traded fund fluctuated, and Nvidia itself saw a decline after its sales forecast, which projected current period revenue of $108 billion (plus or minus 2%), left some investors underwhelmed despite exceeding the average analyst estimate of $105.2 billion. Some projections had been as high as $110 billion.
Treasuries with shorter maturities underperformed, and money markets fully priced in a rate hike by December. While a key inflation gauge, the core personal consumption expenditures price index, matched expectations at a 3.3% annual advance in July, it remained above the Fed's target. The US economy's second-quarter expansion was unrevised at 1.5%, though underlying data showed stronger consumer spending and business investment than initially reported. Analysts noted that while this data wasn't enough to sway the September Fed meeting, sustained trends could pressure policymakers to act.
On Tuesday, US stock markets closed higher, with the Nasdaq Composite leading gains due to a broad recovery in semiconductor stocks. The Dow Jones Industrial Average and S&P 500 also finished positively. This rally was supported by falling Treasury yields, with the 10-year Treasury yield dropping over 7 basis points to 4.625%, and a significant decline in crude oil prices, which fell over 3%. However, weaker consumer confidence data and rising US-Canada trade tensions somewhat dampened overall market enthusiasm. The Information Technology sector was the best performer, gaining 0.7%, while the Energy sector was the worst, falling sharply as oil prices plunged. Brent crude fell 3.9% to $88.58 a barrel, and WTI dropped 3.1% to $82.36.
Prior to its earnings, Nvidia had risen 1.8%, moving back above $210 after its longest losing streak in four years. Other chipmakers like Advanced Micro Devices (AMD) surged 4.85%, Marvell Technology (MRVL) added 4.91%, and Micron Technology (MU) gained 2.48%. Despite the tech-led rally, the broader market showed signs of fragility, with consumer staples under pressure. Oil's decline, with Brent trading just above $87 a barrel, was attributed to Iran and Oman outlining a framework to reopen the Strait of Hormuz. Bond yields also fell ahead of the Jackson Hole symposium, with the US 10-year Treasury yield down 5 basis points.
