Nasdaq ends sharply up, fueled by Nvidia and Amazon

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 17, 2022. REUTERS/Brendan McDermid/File Photo

By Noel Randewich and Bansari Mayur Kamdar

(Reuters) - The Nasdaq ended sharply higher on Thursday, lifted by gains in Nvidia (NASDAQ:NVDA) and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook.

Fed Chair Jerome Powell is due to give a speech on Friday that investors will dissect for indications of how aggressively the Fed may move to raise interest rates as it battles decades-high inflation.

"We're in a period of time between the end of the second-quarter earnings season and meaningful additional data from the Federal Reserve. Markets are churning a bit with a reasonably low level of volatility," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.

The yield on the closely watched 10-year Treasury note faded after recently hitting a two-month high. Declining interest rates tend to benefit technology stocks trading at high valuations.

"Lower interest rates have certainly put some support underneath some of the more growth-oriented sectors," Northey said.

Nvidia rose after the graphics chipmaker gave a weaker-than-expected quarterly forecast that many investors viewed as signaling the worst of a sales downturn may be over. That drove a rally in the Philadelphia semiconductor index.

Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL) also rose, making substantial contributions to the Nasdaq's increase.

Data earlier in the day showed the U.S. economy contracted less than initially thought in the second quarter, dispelling some fears that a recession was underway.

Traders see a slightly greater likelihood of a third 75-basis-point interest hike from the Fed at its policy meeting next month, compared with a 50-basis-point increase. [FEDWATCH]

Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation have been squeezed from the economy.

Electric-vehicle maker Tesla (NASDAQ:TSLA) Inc slid after a 3-for-1 stock split came into effect.

According to preliminary data, the S&P 500 gained 59.77 points, or 1.44%, to end at 4,200.54 points, while the Nasdaq Composite gained 206.15 points, or 1.69%, to 12,641.26. The Dow Jones Industrial Average rose 332.74 points, or 1.01%, to 33,298.67.

Wall Street's busiest trades: https://tmsnrt.rs/3ww2xId

Following Thurday's rally, the S&P 500 remains down about 12% in 2022, while the Nasdaq is down about 20%.

Citigroup Inc (NYSE:C) climbed after saying it plans to close its consumer and commercial banking businesses in Russia starting this quarter.

Salesforce (NYSE:CRM) Inc fell after it cut its annual forecasts over "measured" spending from clients and a hit from a stronger dollar.

Additional chipmakers rallying on Thursday included Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO).