US STOCKS-Wall Street rises as tech bounces back before Nvidia results, bond yields drop

Updates with late afternoon prices, analyst quote in paragraph 4

By Saeed Azhar, Purvi Agarwal and Niket Nishant

NEW YORK, Aug 25 (Reuters) - Wall Street's main indexes rose on Tuesday, as technology stocks recovered from a selloff ahead of AI heavyweight Nvidia's results, while investors found some relief in drops in oil prices and bond yields.

The gains could ease investor concerns sparked by a recent bond market rout that lifted yields and pressured equities. They could also help set the tone before September, a historically weaker month for stocks.

Longer-dated Treasury yields fell as oil prices dropped to a one-week low and traders continued to weigh the implications of Treasury Secretary Scott Bessent's decision to expand Treasury buybacks.

"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.

"But we're pretty constructive on the outlook (for the) next 12, 18 months on the U.S. economy; therefore, we are constructive on the markets as well."

Nvidia's NVDA.O results on Wednesday will be the next test for the earnings-driven rally. Any signs of slowing growth could reignite concerns about stretched valuations and how long the AI boom can sustain them.

"This is the classic problem of being the epicenter of the buildout — when you are the trade, execution stops being a catalyst and becomes a prerequisite," said Mark Malek, chief investment officer at Siebert Financial.

Markets have grown wary of cyclical spending and the methods hyperscalers are using to fund their AI buildouts.

At 2:02 p.m. ET (1802 GMT), the Dow Jones Industrial Average .DJI was up 101.04 points, or 0.19%, to 53,518.20, the S&P 500 .SPX gained 14.20 points, or 0.19%, to 7,667.06 and the Nasdaq Composite .IXIC gained 116.33 points, or 0.45%, to 26,096.52.

TECH STOCKS RECOVER

Most megacaps were trading higher. Nvidia and Meta META.O were up 1.8% and 1.1%, respectively.

Chipmaker Micron MU.O added 1.3%, while the broader chips index .SOX recovered 1% after a 2.7% fall on Monday.

Advanced Micro Devices AMD.O rose 4.4% after Raymond James upgraded the stock.

Shares of biotechnology firm Moderna MRNA.O surged 13.4% after Barclays hiked its target price.

The target price increase on Monday came a week after Moderna and Merck MRK.N reported late-stage trial results for their jointly developed skin cancer vaccine.

Dick's Sporting Goods DKS.N cratered 29% after the retailer cut its annual forecasts. Sportswear company Nike NKE.N dipped 2.8%.

The Personal Consumption Expenditures report on Wednesday could provide greater clarity on price pressures after an in-line consumer inflation reading this month tempered bets on an imminent interest-rate hike by the U.S. Federal Reserve.

On Tuesday, a survey showed U.S. consumer confidence fell in August to its lowest in seven months.

Still, money market participants are pricing in one 25-basis-point rate increase by the end of the year, according to LSEG data.

Against this backdrop, Fed Chair Kevin Warsh's Jackson Hole, Wyoming, speech on Friday will be watched for clues on the central bank's approach to monetary policy.

Advancing issues outnumbered decliners by a 1.39-to-1 ratio on the NYSE. There were 126 new highs and 72 new lows on the NYSE.

On the Nasdaq, 2,865 stocks rose and 1,834 fell as advancing issues outnumbered decliners by a 1.56-to-1 ratio.

The S&P 500 posted eight new 52-week highs and four new lows, while the Nasdaq Composite recorded 87 new highs and 75 new lows.

(Reporting by Purvi Agarwal, Niket Nishant and Arasu Kannagi Basil in Bengaluru and Saeed Azhar in New York; Editing by Pooja Desai, Shinjini Ganguli, Rod Nickel)

((Purvi.Agarwal@thomsonreuters.com;))