U.S. equity markets rallied on Tuesday, driven mainly by bargain-basement buying in AI-related stocks, which had tended to correct of late.

In late morning trading, the Dow Jones advanced 0.5% to 39,502.5 points, while the Nasdaq Composite recovered 1.6% to 17,046.8 points.

The trend was driven by bargain-hunting among the major technology stocks, which rebounded after recently suffering from fears of a "bubble" around the companies most exposed to AI.

Nvidia recovered by nearly 4% after suffering a sequence of profit-taking events, which had led it to give up more than 12% over the past month.

Christopher Dembik, Investment Strategy Advisor at Pictet AM, comments: "Nvidia remains the leading company in its market, facing an explosion in demand with highly competitive products".

"The delay in delivery of its Blackwell chip by a few months in no way calls into question the company's hegemonic positioning", he adds.

Still on the value side, Starbucks climbed more than 14% after terminating Laxman Narasimhan, its CEO for barely a year and a half, with immediate effect, and replacing him with Brian Niccol, the current boss of Chipotle.

Conversely, the Mexican-inspired fast-food chain stalled 12% following the surprise departure of its CEO, who had helped it post a 700% gain on the stock market since his arrival in 2018.

On the Dow, shares in Home Depot, the world's number one DIY store, managed to gain 0.3% despite a downward revision of its annual forecasts on the occasion of the publication of its quarterly results.

Rising interest rates and heightened macroeconomic uncertainty have put broader pressure on consumer demand, resulting in lower spending on home improvement projects", explained the home improvement specialist.

On the economic front, the Labor Department reported this morning that producer prices (PPI) rose by just 0.1% in July compared with the previous month.

Expressed as an annual variation, the rise in producer prices even slowed by 0.5 points to 2.2% in unadjusted data.

This clear deceleration - which testifies to better control of inflationary pressures - is a note of hope for the US economy after many years of price tensions.

Above all, this figure validates the scenario of an easing of the Federal Reserve's monetary policy, with the scenario of a 50 basis point rate cut in September now valued at almost 55% by traders, according to the CME Group's FedWatch tool.

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