NVIDIA, oil, and rates drive carry trade for the market

Briefing.com Summary:

*There is follow-through buying interest in the semiconductor space.

*Several consumer-facing companies posted better-than-expected earnings results.

*Oil prices and bond yields have drifted lower, lending some support to stocks.

The major indices lost ground yesterday, fighting the headwind of rising interest rates that included a 10-yr note yield pushing up to 4.67% and a 30-yr bond yield rising to its highest level (5.19%) in 19 years. That was only the half of it, however. The other half—the half that is winning out this morning—is that the Philadelphia Semiconductor rallied back from a 3.6% decline to finish with a fractional gain.

That rebound in the semiconductor space occurred without a news catalyst. That was key, as it likely triggered some short-covering activity at the same time it demonstrated that buy-the-dip interest had not been killed off by rising rates. Momentum remains alive and, apparently, fairly well.

Could prove to be a nice bookend if NVIDIA (NVDA), up 1.5%, delivers the goods and then some when it reports its quarterly results after the close.

There is some bullish-minded speculation in front of that report. That speculation is helping to bolster the equity futures market, along with the pullback in oil prices (WTI -2.7% to $101.32) and Treasury yields (10-yr -1 bp to 4.66%) this morning.

Currently, the S&P 500 futures are up 25 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 178 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 163 points and are trading 0.4% above fair value.

There is also a semblance of relief that several consumer-facing businesses reporting results since yesterday’s close have not sounded any loud alarm bells about consumer spending activity, notwithstanding some acknowledgments about the uncertain macro environment that features higher rates and higher energy costs.

Target (TGT), Lowe’s (LOW), TJX Cos. (TJX), Toll Brothers (TOL), and CAVA Group (CAVA) have been among the high-profile reporters. Their influence, though, falls well short of the influence the mega-cap stocks have on the major indices.

There is some buy-the-dip interest in general that is carrying things this morning and that carry trade, so to speak, rests mainly on NVIDIA’s back and on the backs of interest rates and oil prices.

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Originally Posted May 20, 2026 – NVIDIA, oil, and rates drive carry trade for the market