The Nasdaq Floats as Oil Sinks and Memory Stocks Recover

Market Overview

Wall Street's major indexes closed higher on Aug 25, as technology stocks recovered from a recent selloff and declines in oil prices and bond yields offered some relief to investors. The S&P 500 rose 23.76 points, or 0.31%, to close at 7,676.62, while the Nasdaq Composite gained 165.28 points, or 0.64%, to 26,145.47. The Dow Jones Industrial Average added 155.75 points, or 0.29%, to end at 53,572.91.

During the session, the Nasdaq was up 0.56% as of 12:13 p.m. ET, with the S&P 500 and Dow up 0.27% and 0.22% respectively, according to The Motley Fool. The gains came as chipmakers, which had fallen sharply the previous day on a China-related headline, rebounded. Nvidia rose 1.6% ahead of its earnings report, and Advanced Micro Devices climbed 4.8% after a bullish analyst note from Raymond James. Memory-chip makers also recovered, with Micron Technology gaining 2% and SK Hynix up 2.4%, as reported by The Motley Fool.

The rally in technology shares helped halt a seven-day losing streak for Nvidia, according to Swissinfo (EN), and the Nasdaq 100 outperformed major benchmarks, rising 0.6%. Most megacaps, including Nvidia, Meta, and Micron, closed higher, as noted by The Straits Times.

Oil and Bond Yields Slide

Oil prices fell sharply, with West Texas Intermediate crude dropping 4.6% to $81.08 a barrel, and Brent crude settling below $90, according to Swissinfo (EN). The decline followed President Trump's statement that the Navy had cleared mines from the Strait of Hormuz, easing concerns about supply, as The Motley Fool reported. A news report of an interim framework discussed by Iran and Oman, and the U.S. returning diplomats to Middle East embassies, also helped sentiment. The United States Oil Fund fell 3.4%.

The drop in oil prices helped push longer-dated Treasury yields lower, with the 10-year yield declining seven basis points to 4.63%, reported by Swissinfo (EN). The Straits Times attributed the yield decline is also due to trader expectations of Treasury Secretary Scott Bessent's decision to expand Treasury buybacks.

Nvidia Earnings and Fed Watch

Investors were turning their attention to Nvidia's earnings report, scheduled for after the close. Analysts estimated the chip maker's revenue nearly doubled last quarter to $92 billion, according to Swissinfo (EN). The focus for investors would be on gross margins, with a threshold of 75% watched, as reported by The Motley Fool.

"There's a lot of push and pull – in the bond market, geopolitics, oil," said Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank, as quoted by The Straits Times. "But we're pretty constructive on the outlook (for the) next 12, 18 months on the US economy; therefore, we are constructive on the markets as well."

Mark Malek, chief investment officer at Siebert Financial, noted the challenge for Nvidia as the center of the AI boom. "This is the classic problem of being the epicentre of the buildout – when you are the trade, execution stops being a catalyst and becomes a prerequisite," he said.

Economists also watched upcoming data: the Federal Reserve's preferred inflation gauge is due Aug 26, and Fed Chairman Kevin Warsh is scheduled to speak on Aug 28. Swissinfo (EN) noted that traders had been unsettled by recent Fed communications. "We believe that future is likely to stick to his future," said Matt Maley, chief market strategist at Miller Tabak. "If he does, it's going to be important that Nvidia has seen a much more positive reaction to its earnings/guidance than most of the other chip stocks have seen this earnings season."

Panda Expressions from the Market

U.S. consumer confidence fell in August to the lowest level in seven months, noted The Straits Times, while Swissinfo (EN) reported the lowest level since the start of the year, citing a deteriorating outlook for business conditions and jobs.

Corporate headlines include OpenAI's new Jalapeno chips, a SpaceX expansion, and Apple's upgraded Mac desktops, each cited by Swissinfo (EN). Moderna shares surged after Barclays increase a target price, as reported by The Straits Times, amid skin cancer vaccine trials. Dick's Sporting Goods published a large stake, attributed to a struggle at the Foot Locker chain, per Swissinfo (EN).

Among other movements, gold prices continued to rise, while Bitcoin was little changed at $78,922.95 and Ether fell by 0.5%, according to Swissinfo (EN).

Stocks closed on a positive note, but the muted gains reflected uncertainty. As Chief Investment Officer Mark Malek put it, "We're anticipating good news here, but so is everybody."