US close: Stocks post solid gains, Nvidia jumps after the bell

US stocks closed with decent gains on Wednesday, as investors waited with anticipation for earnings figures from heavyweight tech group Nvidia, due out after the closing bell.

Nvidia's shares closed up over 3% on the day ahead of its second-quarter results, taking its year-to-date gain to a whopping +229%. The company, a world leader in artificial intelligence computing, is being seen as a bellwether (and somewhat saviour) of market sentiment, following recent heavy losses over the past couple of weeks.

Neil Wilson, chief market analyst at Markets.com, said "clearly a lot is hanging on" the numbers.

After the market close, the stock surged a further 7% after the group posted an 88% quarter-on-quarter jump in revenue to $13.5bn, compared with the $11.2bn consensus forecast, while earnings per share shot up 148% to $2.70, smashing the $2.09 forecast. Meanwhile, the company said it expects to make $16bn in the third quarter, some $3.4bn ahead of analysts' current expectations.

Back to Wednesday's trading session, the tech-heavy Nasdaq closed 1.6% higher at 13,721, the S&P 500 gained 1.1% to 4,436.01, while the Dow rose 0.5% to 34,473. For the S&P 500, it was the index's best daily performance since June.

Helping stocks higher were a drop in bond yields for the second consecutive day after 10-year Treasury yields hit a 16-year high of 4.339% on Monday. 10-year yields fell a further 13.6 basis points to 4.193% on Wednesday.

A survey out during the session showed that business activity fell to a six-month low in August. The S&P Global flash composite purchasing managers’ index declined to 50.4 from 52.0 in July, signalling the weakest upturn in activity since February.

Elsewhere, data from the Commerce Department showed that new home sales rose 4.4% to a seasonally-adjusted annual rate of 714,000 units in July. This was ahead of expectations of 705,000. Meanwhile, June’s sales were revised down to 684,000 from 697,000.

Nvidia leads tech stocks higher

Optimism around Nvidia's results was helping sentiment across the wider tech sector, with blue chips Microsoft, HP and Apple posting big gains.

Foot Locker tanked 28% after the sporting goods retailer cut its full-year forecasts and posted weaker-than-expected second-quarter results. Nike, meanwhile, fell for the 10th straight session – a new record.

Peloton shares slid 23% to a record low after it reported a drop in fourth-quarter revenue, pointing to a slowdown in subscriber growth, and said the cost of its seat recall had "substantially exceeded" initial expectations.

Abercrombie & Fitch soared 24% after beating forecasts with second-quarter sales of $935m, and raising its guidance for full-year sales growth to 10%, from 2-4% previously.