All three major indices rose for the day
[NEW YORK] Wall Street’s main indexes closed higher on Tuesday (Aug 25), as technology stocks recovered from a selloff ahead of AI heavyweight Nvidia’s results, while investors found some relief in drops in oil prices and bond yields.
The gains could ease investor concerns sparked by a recent bond market rout that lifted yields and pressured equities. They could also help set the tone for September, a historically weaker month for stocks.
Longer-dated Treasury yields fell on Tuesday as oil prices dropped to a one-week low and traders continued to weigh the implications of Treasury Secretary Scott Bessent’s decision to expand Treasury buybacks.
“There’s a lot of push and pull — in the bond market, geopolitics, oil,” said Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank.
“But we’re pretty constructive on the outlook (for the) next 12, 18 months on the US economy; therefore, we are constructive on the markets as well.”
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.
“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,” said Mark Malek, chief investment officer at Siebert Financial.
Markets have grown wary of cyclical spending and the methods hyperscalers are using to fund their AI buildouts.
The Dow Jones Industrial Average rose 160.24 points, or 0.30 per cent, to 53,577.40, the S&P 500 gained 24.38 points, or 0.32 per cent, to 7,677.24 and the Nasdaq Composite gained 171.11 points, or 0.66 per cent, to 26,151.30.
Tech stocks recover
Most megacaps closed higher. Nvidia rose 2.2 per cent and Meta climbed almost 2 per cent. Chipmaker Micron gained 2.5 per cent, while the broader chips index ended 1.4 per cent higher after a 2.7 per cent fall on Monday.
Advanced Micro Devices rose 4.9 per cent after Raymond James upgraded the stock.
Shares of biotechnology firm Moderna surged 14 per cent after Barclays hiked its target price.
The target price increase on Monday came days after Moderna and Merck reported late-stage trial results for their jointly developed skin cancer vaccine.
Dick’s Sporting Goods plunged 30.7 per cent after the retailer cut its annual forecasts. Sportswear company Nike dipped. Target shares fell 3.8 per cent after the retailer apologised for and pulled a Halloween costume criticised for evoking blackface, renewing concerns about brand missteps just as its financial turnaround effort had begun to gain traction.
The Personal Consumption Expenditures report on Wednesday could provide greater clarity on price pressures after an in-line consumer inflation reading this month tempered bets on an imminent interest-rate hike by the US Federal Reserve.
On Tuesday, a survey showed US 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.
Against this backdrop, investors will watch Fed Chair Kevin Warsh’s Jackson Hole, Wyoming, speech on Friday for clues on the central bank’s approach to monetary policy.
Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE. There were 190 new highs and 79 new lows on the NYSE.
On the Nasdaq, 3,059 stocks rose and 1,740 fell as advancing issues outnumbered decliners by a 1.76-to-1 ratio.
The S&P 500 posted 11 new 52-week highs and four new lows while the Nasdaq Composite recorded 105 new highs and 85 new lows.
Volume on US exchanges was 14.32 billion shares, compared with the 16.4 billion average for the full session over the last 20 trading days. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
TRENDING NOW Tepid investor interest a dampener on Vietnam’s strong IPO pipeline
Air India seeking US$1.5 billion from owners Tata, Singapore Airlines: sources
OK Lim’s daughter loses challenge to exclude evidence in ongoing trial
UOB v Lippo Marina Collection: Court quadruples damages awarded to bank to S$76.1 million