Dow Jones Rises as Nvidia Leads Tech Surge, Oil Prices Plunge
- Major indexes rise as Nvidia and other large-cap tech stocks gain.
- Crude oil prices drop nearly 5%, reversing recent gains.
- Investors await key inflation data and Fed interest rate decision clues.
Stocks surged in midday trading on Tuesday, with major indexes recovering from the previous session’s sharp downturn. The S&P 500 rose by 0.8%, the Nasdaq climbed 1.2%, and the Dow Jones Industrial Average increased by 0.2%. This followed Monday’s sell-off, which was triggered by rising oil prices and diminishing hopes for significant Fed rate cuts.
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Large-Cap Tech Stocks Drive Market Gains
Leading the charge were large-cap technology stocks, with Nvidia (NVDA) surging by more than 3%. Nvidia also surpassed Microsoft to become the second-largest company by market capitalization. Other tech giants including Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), Alphabet (GOOGL), and Broadcom (AVGO) all posted gains.
Despite reporting quarterly results that fell short of expectations, PepsiCo (PEP) saw a 1% rise in its share price, as investors remained optimistic about the company’s long-term prospects.
Meanwhile, earnings season is set to gain momentum later in the week, with major banks scheduled to report results, providing further insight into the state of the US economy.
Crude Oil Prices Plunge, Energy Stocks Slide
Crude oil futures tumbled by nearly 5%, reversing much of the gains from the previous week, which were driven by fears that Middle East tensions could disrupt the global oil supply.
As oil prices fell, the S&P 500 energy sector dropped by nearly 3%, with major companies like Marathon Petroleum (MPC), Phillips 66 (PSX), and Valero Energy (VLO) experiencing sharp declines.
Economic Data in Focus
The economic calendar is light for Tuesday, but key releases are expected later in the week, including important inflation data and the latest consumer sentiment report. Investors are looking for further confirmation that the US economy remains stable while gauging the Federal Reserve’s next moves on interest rates.
Following last week’s strong jobs report, market sentiment has shifted, with expectations now pointing to two quarter-percentage-point rate cuts from the Fed before year-end. Before the jobs report, investors anticipated a more aggressive approach, including a possible half-point cut at the next Fed policy meeting in November.
Treasury Yields, Gold, and Bitcoin
The yield on 10-year Treasuries remained steady at 4.03%, having jumped above 4% on Monday for the first time in two months as market hopes for significant rate cuts waned.
Meanwhile, gold futures fell by 1.5%, reaching a two-week low of $2,630 an ounce, and bitcoin declined by over 1%, trading at around $62,200.
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