Dow gains 155 points at open as AI stocks surge ahead of Nvidia earnings

US equities rose on Tuesday as Treasury yields fell for a second straight session, while semiconductor stocks advanced as investors positioned ahead of Nvidia's earnings report.

The Dow Jones Industrial Average gained 155 points, or 0.3%. The S&P 500 climbed 0.3%, while the Nasdaq Composite advanced 0.7%.

The benchmark 10-year Treasury yield fell to 4.658%, extending its decline from Monday.

Yields came under pressure after reports that the Treasury Department could use its $1 trillion General Account to fund bond repurchases.

Chip stocks rise ahead of Nvidia earnings

Semiconductor stocks moved higher as investors looked ahead to Nvidia's earnings after the bell Wednesday.

Advanced Micro Devices and Micron Technology each gained 3%, while Intel advanced more than 2%.

Nvidia rose more than 1%, and the iShares Semiconductor ETF gained more than 2%.

Nvidia's results will be closely watched for signs of whether strong artificial intelligence investment can continue to support semiconductor demand and broader equity valuations.

Inflation is also in focus, with the July personal consumption expenditures price index due Wednesday.

The week will conclude with Federal Reserve Chairman Kevin Warsh expected to speak Friday at the Fed's annual symposium in Jackson Hole, Wyoming.

His remarks could provide another catalyst for interest-rate markets.

The speech comes after the Treasury Department announced plans to increase buybacks of longer-dated government debt, part of efforts to ease pressure on long-term Treasury yields.

UBS says investors should stay invested

UBS said Tuesday that it expects bond yields to decline over the longer term, which should support a continued broadening of the global equity rally.

The firm advised investors concerned about elevated yields to "stay invested."

"While higher yields are typically a headwind for equities, we believe strong corporate earnings and expectations of further growth should continue to support global equities broadly," UBS analysts said.

UBS now expects S&P 500 earnings per share to grow 25% this year and another 14% next year.

It forecasts 15% earnings growth in both 2026 and 2027 for Europe, while Asia excluding Japan is expected to post 72% earnings growth this year.

Oil prices fall as US increases Iran pressure

Oil prices also fell sharply Tuesday as the US shifted toward economic sanctions rather than military strikes in its efforts to pressure Iran.

Brent crude futures fell 3.2% to $89.20 a barrel, while West Texas Intermediate crude declined 3.3% to $82.21.

Oil prices have fallen more than 5% this week after the US government announced additional sanctions targeting Iran and entities described as "enablers" that continue to trade with the country.

The decline in crude prices could ease some concerns about persistent inflation, particularly as markets assess the potential impact of elevated energy costs on the Federal Reserve's policy outlook.

The White House has described its campaign against Iran as an "economic D-Day," while Treasury Secretary Scott Bessent has called it the "single greatest financial offensive ever."

Bessent said last week that the increased economic pressure makes a near-term return to large-scale military conflict less likely.

"If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart," Bessent said in an interview with CNBC.