The S&P 500 ended higher on Tuesday ahead of a much-anticipated quarterly report from Nvidia on Wednesday and economic data expected later in the week that could give clues about the path of interest rate cuts.
Heavyweight tech-related stocks were mixed, with the focus on upcoming results from Nvidia (NVDA), the chipmaker at the centre of Wall Street’s rally in AI-related stocks.
Nvidia’s shares climbed and was the most traded company on U.S. stock exchanges, according to LSEG data.
Up 159% in 2024, Nvidia is viewed as the biggest winner so far from AI technology, and its results follow recent concerns about increases in already hefty spending by Microsoft (MSFT), Alphabet (GOOG) and other heavyweights in their race to dominate emerging AI technology.
“There’s a high bar to clear for not just Nvidia’s earnings and guidance, but the story they tell about the state of AI that kind of lifts the tech sector out of its recent funk,” said Ross Mayfield, investment strategy analyst at Baird.
According to preliminary data, the S&P 500.SPX gained 9.26 points, or 0.16%, to end at 5,626.10 points, while the Nasdaq Composite.IXIC gained 29.82 points, or 0.17%, to 17,755.58. The Dow Jones Industrial Average.DJI rose 14.61 points, or 0.04%, to 41,255.13.
Data on Tuesday showed U.S. consumer confidence rose to a six-month high in August, while consumers also became more anxious about the labour market after the unemployment rate jumped to near a three-year high of 4.3% last month.
Investors will look to July Personal Consumption Expenditure data due on Friday for additional hints at the potential pace of rate cuts.
Traders are now betting on an interest rate cut of either 25 or 50 basis points in September, according to CME Group’s Fed Watch tool.
Meanwhile, UBS Global Wealth Management raised the odds of a U.S. recession to 25% from 20%, citing weakness in the labour market.
Paramount Global PARA.O slid after Edgar Bronfman Jr. abandoned his bid for the company, clearing the way for Skydance Media to take control of Shari Redstone’s media empire.
Tesla (TSLA) fell after Canada said it would impose a 100% tariff on the imports of Chinese electric vehicles. The duties apply to all EVs shipped from China, which would include those made by Tesla.
Super Micro Computer SMCI.O declined after short-seller Hindenburg Research said it had a short position in the AI server maker.
The PHLX Housing index.HGX lost after data showed single-family home prices fell in June as higher mortgage rates weighed on demand.
