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Wall Street stocks edged higher on Tuesday as investors rallied around chipmakers ahead of the highly anticipated earnings report from Nvidia this week.
Wall Street’s benchmark S&P 500 rose 0.1 per cent at the New York opening bell, while the tech-focused Nasdaq Composite added 0.3 per cent, with both indices extending gains from the previous session.
Optimism around US technology stocks helped halt the sharp equity sell-off that started last week on worries that the US central bank could keep interest rates elevated for longer than expected.
The Fang+ index, which tracks some of the sector’s megacap companies, gained 0.2 per cent, a day after closing its strongest trading sessions since late July.
Sentiment around semiconductor stocks was also boosted by the release of British chip designer Arm’s Nasdaq listing prospectus, starting the countdown to the biggest US initial public offering in almost two years. The Philadelphia Semiconductor index was up 0.3 per cent.
However, Nvidia, which enjoyed a stellar first half on the back of demand for its artificial intelligence chips, was 0.2 per cent lower ahead of its earnings this week.
Europe’s region-wide Stoxx 600 rose 0.8 per cent, while France’s Cac 40 added 0.7 per cent and Germany’s Dax gained 0.8 per cent.
The Stoxx Europe 600 Technology index led gainers in the region, up 1.9 per cent.
Dutch group ASML, one of Europe’s biggest companies by market capitalisation, rose 3.3 per cent, while France’s STMicroelectronics added 2.6 per cent.
In Asia, where Japan’s Topix gained 1.1 per cent, Hong Kong’s Hang Seng rose 1 per cent and China’s CSI 300 advanced 0.8 per cent.
In government debt markets, yields on the benchmark 10-year US Treasury were flat at 4.34 per cent, a day after a global sell-off that had taken them to their highest level in 16 years.
Yields on the policy-sensitive two-year US government bonds were up 0.04 percentage points to 5.03 per cent. Bond yields rise as prices fall.
Investors are looking ahead to this week’s economic policy conference in Jackson Hole, Wyoming, where Federal Reserve chair Jay Powell is expected to signal the future path for US interest rates.
“The general consensus appears to be for a slightly hawkish leaning tone from the Fed chair, [ . . . ] with a pushback against the discount of rate cuts further out,” said Padhraic Garvey, regional head of Americas research at ING.
A recent string of strong economic data in the US has pushed investors to bet that the central bank will keep the federal funds rate elevated for a while longer, having taken it to a 22-year high at the last policy meeting.
