U.S. stocks closed at new record highs Tuesday, led by gains in the tech sector as investors positioned ahead of a critical earnings stretch. Nvidia (NVDA) surged over 4%, lifting the broader market after multiple analysts raised their price targets, citing strong demand for AI infrastructure and optimism about its upcoming earnings.

The S&P 500 rose 0.8% to close at 5,420.14, a fresh all-time high. The Nasdaq Composite gained 1.1% to 18,012.76, and the Dow Jones Industrial Average added 0.6%, ending the day at 41,420.57.

Nvidia’s rally comes ahead of its highly anticipated Q2 earnings, expected in mid-August. The stock is now up over 85% year to date, pushing its market cap above $3.9 trillion, trailing only Apple and Microsoft in global valuations.

Other AI-linked names also climbed: AMD gained 2.3%, Microsoft rose 1.9%, and Meta added 2.1%, reinforcing bullish sentiment around the sector.

Investors are cautiously optimistic as the Q2 earnings season ramps up. Key reports from Tesla (TSLA), Netflix (NFLX), and Goldman Sachs (GS) are due this week. These results will be closely watched for updates on consumer demand, AI investment, and profit margins.

Meanwhile, bond yields edged lower, with the 10-year Treasury yield falling to 4.06%, reflecting continued belief that the Federal Reserve will hold interest rates steady at its July 30–31 policy meeting.

Bitcoin (BTC) hovered near $67,100, while Ethereum (ETH) remained above $3,500, tracking strength in risk assets. Crypto markets appear resilient as investor appetite for growth remains intact.

Despite the current momentum, some analysts warn that markets are vulnerable to disappointment if earnings fall short.