Wall Street ends higher as tech rebounds

Stock markets on Wall Street finished higher on Tuesday, following a rebound in technology shares after a downturn ahead of Nvidia's AI results, as investors gained some comfort from falling oil prices and bond yields. Treasury yields decreased on Tuesday due to a drop in oil prices to a one-week low and ongoing speculation about the impact of Treasury Secretary Scott Bessent's decision to extend Treasury buybacks.

On Monday, Bessent had cautioned nations to sever financial ties with Iran to avoid secondary sanctions, as part of a strategy referred to as "economic D-Day." However, oil prices declined to a one-week low on Tuesday, with traders perceiving less risk to oil supplies from economic sanctions than the possibility of a military conflict.

According to Joe Quinlan, Merrill and Bank of America Private Bank's head of market strategy, the bond market, geopolitics, and oil prices are in a state of flux, but long-term prospects for the U.S. economy remain positive, leading to an optimistic outlook for the markets. Nvidia's recent performance will serve as a gauge for the earnings-driven rally, as any signs of slowing growth could reignite worries about stretched valuations and the sustainability of the AI boom.

Mark Malek, chief investment officer at Siebert Financial, noted that markets have become more cautious about cyclical spending and the methods hyperscalers employ to fund their AI initiatives. Most large-cap stocks closed in the green on Tuesday. Nvidia's shares rose 2.2 percent, while Meta increased almost 2 percent. Micron Technology gained 2.5 percent, and the broader chip index ended 1.4 percent higher after a 2.7 percent drop on Monday.

Advanced Micro Devices rose 4.9 percent following an upgrade from Raymond James. Shares of biotech company Moderna surged 14 percent after Barclays raised its target price, following late-stage trial results for their jointly developed skin cancer vaccine announced on Monday. Dick's Sporting Goods fell 30.7 percent after the retailer lowered its annual earnings forecasts.

Nike declined as well. Target's shares dropped 3.8 percent after the retailer apologized for and withdrew a Halloween costume that some found offensive for its blackface depiction, raising concerns about brand missteps just as the company was beginning to see progress in its turnaround efforts.