Canada slaps counter tariffs of up to 50 pct on US

On Tuesday, Wall Street's main indexes finished higher as technology stocks rebounded prior to AI giant Nvidia's results, while investors found solace in falling oil prices and bond yields. This positive outcome may help alleviate investor worries stemming from a recent bond market turmoil that drove yields up and negatively impacted equities. The gains could also contribute to shaping the tone for September, a month typically characterized by weaker stock performance.

Treasury yields declined on Tuesday, as oil prices fell to a weekly low and traders deliberated the implications of Treasury Secretary Scott Bessent's decision to expand Treasury buybacks. Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank, noted the ongoing push and pull between various factors, including bond market dynamics, geopolitics, and oil prices.

Despite this, both he and Mark Malek, chief investment officer at Siebert Financial, expressed a constructive outlook for the US economy over the next 12 to 18 months, thereby maintaining optimism about the market.

Nvidia's upcoming results on Wednesday will serve as the next key test for the earnings-driven rally. Any indications of a slowdown in growth could reignite concerns about stretched valuations and the sustainability of the AI boom. This reflects the classic challenge faced by the epicenter of the buildout, where being the trade becomes a prerequisite rather than a catalyst. Market participants have become wary of cyclical spending and the methods hyperscalers employ to finance their AI expansion efforts.

Most megacaps closed higher on Tuesday. Nvidia increased by 2.2 percent, while Meta rose nearly 2 percent. Chipmaker Micron gained 2.5 percent, and the broader chips index ended 1.4 percent higher following a 2.7 percent drop on Monday. Advanced Micro Devices climbed 4.9 percent after Raymond James raised its stock rating. Biotechnology firm Moderna experienced a surge of 14 percent after Barclays raised its target price.

Notably, the target price increase occurred days after Moderna and Merck disclosed late-stage trial results for their jointly developed skin cancer vaccine. Dick's Sporting Goods experienced a sharp decline of 30.7 percent after the retailer revised its annual forecasts downward. Sportswear company Nike also dipped in value. Target shares dropped 3.8 percent following the retailer's apology for and removal of a Halloween costume that drew criticism for evoking blackface, reigniting concerns about brand missteps as its financial turnaround efforts gained momentum.

The Personal Consumption Expenditures report on Wednesday may shed more light on price pressures following a relatively stable consumer inflation reading this month, which tempered expectations of an imminent interest-rate hike by the US Federal Reserve. Additionally, a survey indicated that US consumer confidence fell in August to its lowest level in seven months.

Despite these developments, money market participants are pricing in a 25-basis-point rate increase by the end of the year. Fed Chair Kevin Warsh is set to deliver a speech at the Jackson Hole, Wyoming, event on Friday, providing further insight into the central bank's stance on monetary policy. On the trading front, advancing issues outnumbered decliners by a ratio of 1.71-to-1 on the NYSE, with 190 new highs and 79 new lows.

On the Nasdaq, 3,059 stocks rose and 1,740 fell, showcasing a 1.76-to-1 ratio of advancing issues to declining ones. The S&P 500 recorded 11 new 52-week highs and four new lows, while the Nasdaq Composite achieved 105 new highs and 85 new lows. Overall, volume on US exchanges reached 14.32 billion shares, surpassing the 16.4 billion average for the full session over the past 20 trading days.