US markets advanced on Tuesday powered by a bounce-back in technology shares following a recent pullback, according to a Reuters report. Market focus remains centered on upcoming quarterly earnings from artificial intelligence leader Nvidia and key inflation data that could shape future Federal Reserve policy decisions.
At 10:56 a.m. ET, the Dow Jones Industrial Average rose 22.16 points, or 0.04%, to 53,439.32, the S&P 500 gained 11.36 points, or 0.15%, to 7,664.22 and the Nasdaq Composite gained 121.83 points, or 0.47%, to 26,102.02.
The early strength offered relief to investors following a bond market selloff that lifted Treasury yields and weighed on equities. The gains also helped set a positive tone as Wall Street prepares to enter September, traditionally a volatile month for equity performance.
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"The market's going to be more volatile but it's still early in the AI story," Geoff Strotman, head of Segal Marco Advisors' Alpha Investment Research Group, told Reuters.
"There's some concern about valuations but the run that we've had in equities is not unjustified because earnings are strong."
The sustainability of the earnings-led rally could face another test this week following Nvidia’s results on Wednesday. Signs of slowing growth may revive concerns over stretched valuations and the longevity of the AI-driven market rally.
Markets have become increasingly cautious about cyclical spending in the sector and the financing strategies hyperscalers are using to fund their AI infrastructure expansion.
Tech Recovery
Most large stocks were trading higher, with Nvidia and Meta gaining 1.4% and 0.9%, respectively.
Chipmakers Intel and Micron added 3.1% and 3.9%, respectively. Data-storage company Western Digital rose 3.7%.
Advanced Micro Devices rose 3.4% after Raymond James upgraded the stock.
Dick’s Sporting Goods plunged 22.6% after the retailer cut its annual forecasts, citing challenging market conditions. Sportswear major Nike also fell 3.2%.
Inflation and Fed rate watch
Meanwhile, Wednesday’s PCE inflation report could offer further insight into price pressures in the economy. An in-line consumer inflation reading earlier this month had reduced expectations of a U.S. Federal Reserve rate hike in September.
However, money market participants continue to price in one 25-basis-point rate increase by the end of the year, according to LSEG data.
Against this backdrop, Fed Chair Kevin Warsh’s Jackson Hole speech on Friday will be closely watched for signals on the central bank’s monetary policy path.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
