By Amruta Khandekar and Shristi Achar A
(Reuters) -U.S. stock index futures advanced on Tuesday as optimism around Nvidia's keenly awaited earnings report kept megacap growth stocks on a strong footing, while easing yields on longer-dated government bonds also provided some support.
After sharp losses in the previous week on worries over higher-for-longer interest rates and a surge in Treasury yields, U.S. equities regained some ground on Monday due to a rally in Nvidia and other tech stocks ahead of the chip designer's second-quarter earnings on Wednesday.
Shares of Nvidia climbed 1.7% in premarket trading on Tuesday after adding nearly 9% in the previous session and closing about 2% short of their all-time high of $480.88.
Other big technology and growth stocks also rose, with Tesla advancing 3.4% after logging its biggest one-day percentage gain since March on Monday.
Investors will be keen to see if Nvidia's results can match up to heightened market expectations following a blockbuster report last quarter that fueled a blistering rally in tech stocks amid the frenzy around artificial intelligence.
"A very high bar is being set for the chipmaker and the disappointment could be amplified if it falls short of heightened expectations," said AJ Bell Investment Director Russ Mould.
Meanwhile, the yield on the 10-year Treasury note slipped from a 15-year high of 4.35%, helping release some pressure off equities.
The recent selloff in bonds was driven by evidence of a strong U.S. economy, which dampened hopes of the Federal Reserve easing monetary policy anytime soon.
A meeting of central bankers at Jackson Hole, which starts on Thursday, will be closely monitored by investors for more clues on the direction for U.S. interest rates. Fed Chair Jerome Powell's speech at the meeting will grab the spotlight on Friday.
Traders' bets of a pause in rate hikes next month stand at 86.5%, while odds of a 25 basis point rate hike in November have risen to nearly 39% from about 35.8% a week ago, according to CME Group's FedWatch tool.
Quarterly results from a number of consumer goods makers were also in focus on Tuesday. Lowe's Cos rose 3.2% after the home improvement retailer topped quarterly profit estimates.
Macy's jumped 4% after the department store chain beat second-quarter sales estimates, while Coty slipped 2.0% after the perfume and cosmetics maker forecast annual profit below Wall Street expectations.
At 7:08 a.m. ET, Dow e-minis were up 66 points, or 0.19%, S&P 500 e-minis were up 17.25 points, or 0.39%, and Nasdaq 100 e-minis were up 79 points, or 0.53%.
Among other stocks, shares of Zoom Video Communications rose 2.8% in premarket trading after the video-conferencing platform forecast third-quarter profit above Wall Street estimates.
Activision Blizzard gained 1.3% after Microsoft offered to sell the "Call of Duty" maker's non-European streaming rights to Ubisoft Entertainment to get the deal past British regulators.
(Reporting by Amruta Khandekar and Shristi Achar A; Editing by Shinjini Ganguli)
