After moving mostly higher early in the session, stocks have seen further upside over the course of the trading day on Tuesday. The major averages have all climbed firmly into positive territory, with the tech-heavy Nasdaq leading the charge.
In recent trading, the major averages have reached new highs for the session. The Nasdaq is up 230.36 points or 1.7 percent at 13,736.23, the S&P 500 is up 51.60 points or 1.2 percent at 4,439.15 and the Dow is up 224.11 points or 0.7 percent at 34,512.94.
The surge by the Nasdaq comes as tech stocks are rallying ahead of earnings news from Nvidia (NVDA), with the chipmaker due to release its fiscal second quarter results after the close of trading.
The results from Nvidia, a leader in the AI space, could have a significant impact on the outlook for the technology sector.
“When the trading week is over, the key for stocks might not be Jackson Hole, but Nvidia’s outlook for the AI trade,” said Edward Moya, senior market analyst at OANDA.
He added, “Wall Street has already priced in higher for longer, but they are unsure if Nvidia will be able to bolster confidence for the mega-cap tech trade.”
A steep drop by bond yields has also generated some buying interest, as the ten-year yield is pulling back further off highest levels in well over fifteen years.
The strength on Wall Street has also partly been attributed to some disappointing economic data, which helped ease recent concerns about the outlook for interest rates.
S&P Global released data showing a slowdown in the pace of growth in service sector activity in the month of August as well as a contraction in manufacturing activity during the month.
Meanwhile, the Commerce Department released a separate report showing new home sales rebounded by much more than expected in the month of July.
The Commerce Department said new home sales spiked by 4.4 percent to an annual rate of 714,000 in July after tumbling by 2.8 percent to a revised rate of 684,000 in June.
Economists had expected new home sales to jump by 1.2 percent to a rate of 705,000 from the 697,000 originally reported for the previous month.
With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 773,000 in February 2022.
Gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.7 percent.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for December delivery jumping $21.40 to $1,947.40 an ounce.
Software, computer hardware and semiconductor stocks have also moved significantly higher, contributing to the surge by the tech-heavy Nasdaq.
Housing stocks are also seeing considerable strength following the upbeat new home sales data, resulting in a 1.6 percent gain by the Philadelphia Housing Sector Index.
Most of the other major sectors have also moved to the upside on the day, with notable strength visible among commercial real estate, airline and brokerage stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.5 percent, while China’s Shanghai Composite Index slumped by 1.3 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.7 percent, the German DAX Index rose by 0.2 percent and the French CAC 40 Index inched up by 0.1 percent.
In the bond market, treasuries have moved sharply higher, adding to the modest gains seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.4 basis points at 4.194 percent.
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