Yesterday, memory chips fell apart on a China headline. Today, they got back up again. That's the market for you, one day before Nvidia (NVDA +1.84%) reports and everyone finds out whether the AI trade still has legs.
The Nasdaq Composite (^IXIC +0.54%) leads with a 0.56% gain as of 12:13 p.m. ET. The S&P 500 (^GSPC +0.23%) follows at a 0.27% increase, and the Dow Jones Industrial Average (^DJI +0.14%) added 0.22%. Small gains all around on a quiet day.
Chip stocks bounce back gently before Nvidia's report
Chips are reversing Monday's slide. Nvidia rose 1.6% ahead of Wednesday's earnings, the largest positive contributor to both the S&P 500 and the Nasdaq. A bullish analyst note sent Advanced Micro Devices (AMD +4.43%) 4.8% higher. Memory names recovered some of yesterday's pain with Micron Technology (MU +1.51%) gaining 2% and SK Hynix (SKHY +2.21%) up 2.4%.
Wednesday will be this week's main event, at least in the tech sector. Nvidia reports Q2 2027 results after the close; investors and analysts should watch the chip designer's margins more than the usual top- and bottom-line figures. Gross margins significantly below 75% would signal Nvidia absorbing some of the soaring memory costs to protect its dominant AI accelerator market share. Numbers far above 75% would send the opposite signal.
Image source: Getty Images.
Oil, meanwhile, took a dive. The United States Oil Fund (USO -3.43%) fell 3.4% after President Trump said the Navy had cleared mines out of the Strait of Hormuz. Oil tanker traffic is still a trickle, but traders took the mine-clearing statement as a sign that supply fears could ease.
On the Dow, Goldman Sachs (GS +1.64%) rose 1.6% for about 96 index points, the largest single contribution given its heavy weighting. Declines were minor and widespread; 17 of the 30 components were lower, but no single drop was large.
NASDAQ Composite Index
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Why hard assets are climbing again
The most notable action right now is outside the stock market. Gold and Bitcoin (BTC -0.13%) have surged in recent days on the idea that hard assets gain when investors worry about government debt and a weaker dollar. Gold is on track for its biggest monthly gain since 1999, and Bitcoin touched $80,000 this morning after dipping below $60,000 in June. Their moves were small today, but I'm starting to see bullish patterns over time here.
What lit the fuse was last week's Treasury move to ramp up its bond buybacks. That's a fairly unusual step that came right after the national debt passed $40 trillion and the 30-year Treasury yield brushed nearly 5.34% -- close to a two-decade high. The signal that the government feels compelled to support the bond market is precisely what drives money toward other asset types.
