Stocks Rebound With Nvidia’s Earnings And Warsh’s Jackson Hole Address In Focus

Stocks rebounded on Tuesday following Monday's losses as investors wait for Nvidia's quarterly earnings and Fed Chair Kevin Warsh's address at Jackson Hole to determine the market's next steps.

The Dow Jones Industrial Average gained 0.30%, while the S&P 500 gained 0.32%. The tech-heavy Nasdaq Composite overperformed, climbing 0.66%.

Bond yields fell, with the benchmark 10-year Treasury dropping to 4.637. They had also fallen on Monday after CNBC reported that the Treasury could dip into its $1 trillion General Account to fund debt buybacks.

However, strategists from Goldman Sachs and Wells Fargo said the strategy won't help reverse the jump in long-term yields.

"We think the buybacks themselves are unlikely to meaningfully reset rate levels even if scaled up," the note adds.

On the same day, strategists from Wells Fargo that achieving lower yields would need macroeconomic changes, rather than intervention from the U.S. Treasury.

"From here we think another catalyst is needed to move long-end yields lower," they said, noting that they can include "a slowdown in growth and inflation, less uncertainty around Fed balance sheet and rate policy, fiscal consolidation or a slowdown in IG issuance."

Nvidia, on its end, is preparing to deliver one of the most closely watched earnings reports on Wall Street, with investors looking for evidence that the artificial intelligence boom still has enough momentum to justify the enormous sums pouring into chips, data centers and computing infrastructure.

The chip giant is expected to report fiscal second-quarter adjusted earnings of $2.09 per share on revenue of roughly $92 billion, according to Bloomberg consensus estimates cited by Yahoo Finance. That would represent a staggering 96% increase in revenue from a year earlier and another acceleration from the previous quarter.

Nvidia's results will arrive at a particularly important moment for the AI trade. Chip stocks have struggled to maintain their momentum following a steep selloff in July, when concerns resurfaced over whether Big Tech companies will ultimately generate sufficient returns from the hundreds of billions of dollars they are spending on AI infrastructure.

Recent results from Microsoft, Amazon and Google helped ease some of those concerns. Strong growth in their cloud businesses showed continued demand for AI computing capacity. At the same time, investors have become increasingly sensitive to capital spending, with Google and Meta facing scrutiny over plans to continue pouring money into AI.