U.S. stocks ended higher on Tuesday as tech stocks rebounded following a sell-off earlier in the session, while a drop in bond yields brought some relief to investors. All three major indexes ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.3%, or 160.24 points, to close at 53,577.40 points, recording its third straight day of gains.
The S&P 500 rose 0.3%, or 24.38 points, to finish at 7,677.24 points. Tech and communication services stocks were the biggest gainers.
The Information Technology Select Sector SPDR (XLK) gained 0.9%. The Communication Services Select Sector SPDR (XLC) rose 0.8%. Six of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.7%, or 171.11 points, to end at 26,151.30 points.
The fear gauge, the CBOE Volatility Index (VIX), was down 2.52% to 15.45. Advancers outnumbered decliners on the NYSE by a 1.71-to-1 ratio. On the Nasdaq, a 1.76-to-1 ratio favored advancing issues. A total of 14.32 billion shares were traded on Tuesday, lower than the last 20-session average of 16.4 billion.
On the NYSE, there were 190 new highs and 79 new lows. On the Nasdaq, there were 105 new 52-week highs and 85 new lows. On the S&P 500, there were 11 new 52-week highs and four new lows.
Bond Yields Drop
Bond yields fell for the second straight day on Tuesday, much to the relief of investors as oil prices eased. The decline in bond yields came following a report on Monday that Treasury Secretary Scott Bessent could put to use the department’s nearly $1 trillion General Account to help finance bond buybacks.
The 10-year Treasury yield slid more than 7 basis points to settle at 4.625%. Oil prices also eased further on Tuesday, with West Texas Intermediate crude futures falling over 3%.
Chip Stocks Rally
Tuesday’s rebound was primarily led by a chip rally ahead of NVIDIA Corporation’s (NVDA) quarterly results. The semiconductor giant will be reporting quarterly results on Wednesday, which could act as a catalyst for the broader market.
Shares of NVIDIA rose 2.2% on Tuesday. Micron Technology, Inc. (MU) and Advanced Micro Devices, Inc. (AMD) gained 2.5% and 4.9%, respectively. Micron Technology has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other mega-cap tech companies like Meta Platforms, Inc. (META) ended 2% higher, while Netflix, Inc. (NFLX) gained 2.8%.
Investors’ sentiment has remained low lately, with the situation worsening as the trade war between the United States and Canada appeared to escalate with the latter slapping retaliatory tariffs on American imports.
Investors are also awaiting the speech from Federal Reserve Chairman Kevin Warsh at the Jackson Hole Economic Policy Symposium this week, which could give them a clear picture of the central bank’s future monetary path.
Economic Data
Investors’ sentiment was further dented on Tuesday after the Conference Board’s report showed that consumer confidence fell to a seven-month low reading of 89.4 in August, declining 0.8% from the prior month and falling short of the consensus estimate of 90.2.
In other economic data released on Tuesday, the S&P Cotality Case-Shiller Index showed that U.S. home prices rose 0.4% sequentially in June and 1.5% year over year.
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