Nasdaq gains as chip stocks rally ahead of Nvidia earnings

U.S. stocks rose modestly on August 24, with the Nasdaq Composite leading the major indexes higher as a rally in semiconductor stocks helped offset broader caution ahead of Nvidia's closely watched earnings report later in the week.

Treasury yields ease again

Treasury yields fell for a second consecutive session, with the benchmark 10-year yield dropping more than seven basis points, providing additional support to equities. The move followed reports that the Treasury Department could tap its General Account to help fund bond repurchases, a development traders said eased some lingering concerns about bond market liquidity after yields had spiked sharply following the Federal Reserve's contentious July rate decision, when the 30-year Treasury yield briefly topped 5.2%, its highest level since 2007.

Trade tensions add to the mix

Sentiment was tempered somewhat by a weaker-than-expected consumer confidence reading and signs of a worsening trade dispute between the United States and Canada, which weighed on some segments of the market even as the broader indexes advanced. Oil prices fell more than 3% during the session, adding to a broader pullback in energy markets that has coincided with diplomatic progress on reopening key Middle East shipping routes through the Strait of Hormuz, where Iran and Oman were separately discussing a temporary joint shipping corridor around the same time.

Investors were largely positioning ahead of Nvidia's results, due after markets closed on August 26 and widely seen as a bellwether for the health of AI-related capital spending heading into the rest of the year. Nvidia went on to report fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier, and guided to $108 billion for the current quarter, results that came in well above the consensus estimates analysts had penciled in ahead of the report.