Nvidia Results to Set Tone for Earnings-Driven Rally

Wall Street's main indexes rose on Tuesday as technology stocks rebounded from Monday's selloff ahead of AI heavyweight Nvidia's results and an inflation report that could shape interest rate expectations.

The gains may ease investor concerns sparked by a recent bond market rout that has lifted yields and pressured equities. They also set the tone before September, historically a weaker month for stocks.

Nvidia's results on Wednesday will be the next test for the earnings-driven rally. Any signs of slowing growth could reignite concerns over stretched valuations and how long the AI boom can sustain.

According to Mark Malek, chief investment officer at Siebert Financial, '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.' He added that Nvidia CEO Jensen Huang needs to hand the market a new story for the stock to move forward.

Most megacaps were trading higher, with Nvidia and Meta up 1.3% and 0.8%, respectively. Chipmakers Intel and Micron added 1.5% and 2.5%, respectively. Data-storage company Western Digital rose 1.8%. The broader chips index recovered 1.5% after a 2.7% fall on Monday.

Advanced Micro Devices rose 5% after Raymond James upgraded the stock. However, Dick's Sporting Goods cratered 28% after the retailer slashed its annual forecasts. Sportswear giant Nike also dipped 2.8%.