S&P 500 rides Nvidia surge, shrugging off jolt in Treasury yields to 16-year highs

August 21, 2023 11:20 AM PDT | By Investing

S&P 500 rides Nvidia surge, shrugging off jolt in Treasury yields to 16-year highs — Image source: Kalkine Media

Nvidia leads surge in Technology ahead of results

Tech stocks were led higher by a more than 6% surge in NVIDIA Corporation (NASDAQ:NVDA) ahead of the chipmaker’s quarterly results due Wednesday.

Nvidia has been riding the wave of AI optimism since surprising Wall Street with blowout guidance in the fiscal quarter.

Ahead of the chipmaker’s third-quarter results, some are expecting more of the same on expectations amid optimism of an AI-led boost to data center growth.

"While we see hyperscale as being the largest consumer of AI training servers; demand for AI GPUs from entities beyond cloud services providers (emerging AI clouds, sovereign states, large enterprises, etc.) increased substantially from late March through the course of CQ2,” Wedbush said in a recent note.

Treasury yields hit more than decade high ahead of Jackson Hole

Treasury yields started the week on the front foot, with the 10-year Treasury yield surging to a more than 16-year high as investors anticipate that Federal Reserve chairman Jerome Powell may hint that further work is likely needed to slow inflation following recent signs of healthy economic growth.

“With the market broadly on board with at least one additional rate hike by year-end, Powell is likely to emphasize the need to remain at a sufficiently restrictive level for some time with still ‘significant’ upside risks to inflation,” Stifel said in a note.

Tesla surges on Wall Street praise

Tesla Inc (NASDAQ:TSLA) rose more than 6% as investors bought a recent dip in the electric vehicle maker on the heels of fresh positive remarks from Wall Street.

Baird placed Tesla on its ‘best ideas’ list, outlining several tailwinds -- including the Cybertruck launch, the wider adoption of self-driving software, and ongoing growth in the energy business – that could overshadow concerns about softer margins from recent price cuts.

Palo Alto shines on earnings stage

Palo Alto Networks (NASDAQ:PANW) rose more than 15% after the software maker reported better-than-expected quarterly earnings and annual guidance that topped Wall Street estimates.

“The results were better than feared and the company's end-to-end cybersecurity platform is set to yield solid financial leverage and more than 35% free cash flow,” Oppenheimer said, adding that the company’s "platformization" of its portfolio can successfully deliver sustainable profitable growth.

This article first appeared in Investing.com

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