The S&P 500 closed slightly higher on Tuesday as Treasury yields continued to fall for a second consecutive session, while strength in semiconductor stocks helped lift the Nasdaq Composite.
The broader market index gained 0.32% to finish at 7,677.28, while the Nasdaq Composite advanced 0.66% to 26,151.30. The Dow Jones Industrial Average increased by 160.24 points, or 0.3%, closing at 53,577.40 and marking its third straight winning session.
Lower Bond Yields Support Stocks
Treasury yields declined again, with the benchmark 10-year Treasury note yield falling more than 7 basis points to 4.625%.
Yields also moved lower on Monday after reports that the U.S. Treasury Department could use its $1 trillion General Account to finance bond repurchases. On Tuesday, West Texas Intermediate crude futures also dropped more than 3%, helping ease some pressure on markets.
Semiconductor Stocks Rally Ahead of Nvidia Earnings
Technology stocks gained momentum as investors positioned ahead of Nvidia’s earnings report scheduled for Wednesday after the market close.
Nvidia shares rose 2%, ending a seven-session losing streak. Other semiconductor companies also posted gains, with Advanced Micro Devices increasing 4.9% and Micron Technology rising 2.5%.
Investors are closely watching Nvidia’s results for signs of continued strength in artificial intelligence demand and the broader outlook for the semiconductor sector.
Retail Stocks Face Pressure After Weak Results
Consumer-focused companies struggled during the session, led by Dick’s Sporting Goods, which plunged 30% after disappointing earnings results. The decline marked the worst trading day in the company’s history.
Other major retailers also faced selling pressure, with Walmart shares falling 1% and Target declining nearly 4%.
Consumer Confidence and Trade Tensions Weigh on Sentiment
Market sentiment was pressured by weaker-than-expected consumer confidence data and renewed trade tensions between the United States and Canada.
The Conference Board’s Consumer Confidence Index declined to 89.4 in August, down 0.8 points and below economists’ expectations of 90.2. Consumers became increasingly pessimistic about future economic conditions.
Canada also announced retaliatory tariffs against the United States, matching the 50% levies introduced by President Donald Trump over the weekend.
Despite weaker sentiment, some analysts noted that consumer spending remains more important for corporate earnings than survey-based confidence indicators.
“Markets can look past a bad mood. They can’t look past a consumer who actually stops spending,” said Bret Kenwell, U.S. investment analyst at eToro.
Investors Await Inflation Data and Fed Signals
Markets are now focused on upcoming economic data, including the July personal consumption expenditures (PCE) price index report, which is considered a key inflation measure for the Federal Reserve.
Investors are also watching Federal Reserve Chair Kevin Warsh’s upcoming speech at the central bank’s annual Jackson Hole symposium in Wyoming on Friday.
The speech comes after the Treasury Department announced plans to double the size of planned bond repurchases, an effort aimed at reducing pressure on longer-term Treasury yields.
