Equities Climb as Tech Sector Rebounds, Bond Yields and Oil Prices Drop
Market Overview and Key Drivers
By Sinéad Carew and Marc Jones
NEW YORK/LONDON, Aug 25 (Reuters) - MSCI's global equities gauge rose on Tuesday as investors waited for economic data and Nvidia's financial results, while bond yields declined and oil prices fell following a U.S. threat to expand sanctions against Iran.
Bond Yields and Treasury Actions
Yields on U.S. 10-year and 30-year bonds showed a second straight day of declines as traders weighed the implications of U.S. Treasury Secretary Scott Bessent's decision last week to expand Treasury buybacks.
On Monday, Bessent had warned countries to cut their financial ties with Iran or face secondary sanctions as part of what had been billed as "economic D-Day." However, oil prices fell to a one-week low on Tuesday as traders viewed economic pressure as less of a risk to oil supplies than a military escalation.
Technology Sector Performance
On Wall Street, the heavyweight technology sector recouped some of Monday's losses, ahead of the release of second-quarter results from AI chip leader Nvidia after market close on Wednesday.
Nvidia Results Provide a Focus
NVIDIA RESULTS PROVIDE A FOCUS
"Technology is stronger today after the recent weakness," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, noting that much of the boost was from Nvidia whose upcoming results are on investors' minds.
"Nvidia has been weak and its price-to-earnings valuation has been down. There are buyers of Nvidia here looking for a strong earnings report. Nvidia is helping to pull up the rest of the tech market."
The strategist also said Treasury yields were "moving in the opposite way they have been moving which is positive for the stock market," but that the move was modest.
Major Index Movements
The Dow Jones Industrial Average rose 160.24 points, or 0.30%, to 53,577.40, the S&P 500 rose 24.42 points, or 0.32%, to 7,677.28 and the Nasdaq Composite rose 171.11 points, or 0.66%, to 26,151.30.
MSCI's gauge of stocks across the globe rose 4.77 points, or 0.42%, to 1,150.00.
Earlier, the pan-European STOXX 600 index closed up 0.35%. MSCI's broadest index of Asia-Pacific shares outside Japan closed up 0.56% at 1,642.24, while Japan's Nikkei rose 328.34 points, or 0.50%, to 65,856.43.
Fixed Income and Currency Markets
Bond Yields
In Treasuries, the yield on benchmark U.S. 10-year notes fell 7.92 basis points to 4.625%, from 4.704% late on Monday while the 30-year bond yield fell 6.9 basis points to 5.162%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 5.98 basis points to 4.176%.
Currency Movements
Among currencies, the U.S. dollar was virtually unchanged as investors weighed Washington's expanded sanctions against Iran and renewed efforts to ease pressure on longer-dated Treasury yields.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.1% to 98.87, with the euro up 0.13% at $1.1677.
Against the Japanese yen, the dollar strengthened 0.03% to 159.13.
Alternative Assets and Commodities
Cryptocurrencies
In cryptocurrencies, bitcoin fell 0.04% to $78,893.30, after earlier crossing above the $80,000 level for the first time since mid-May.
Energy Markets
In energy markets, U.S. crude settled down 3.12%, or $2.65, at $82.36 a barrel and Brent settled at $88.58 per barrel, down 3.89%, or $3.59.
Gold Prices
Gold prices were slightly higher on Tuesday, after scaling a more than three-month high earlier in the session. The rally lost momentum near a key psychological resistance level while investors waited for the release of the U.S. Federal Reserve's preferred gauge of inflation on Wednesday.
Spot gold rose 0.31% to $4,665.86 an ounce. U.S. gold futures fell 0.23% to $4,630.00 an ounce.
Reporting Credits
(Reporting by Sinéad Carew in New York, Marc Jones in London, Rae Wee in Singapore; Editing by Barbara Lewis and Lisa Shumaker)
