Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are trading higher on Tuesday, up by 0.31% and 0.62%, respectively.

Falling oil prices are supporting equities while easing inflation fears. Brent crude (BZ), the global oil benchmark, is down by 4% on the day. Brent has drifted lower after the U.S. signaled a pivot to targeting Iran's economy instead of using military force. At the same time, traffic through the Strait of Hormuz remains severely restricted with Iran continuing to launch attacks against ships.

Yields Fall And AI Stocks Rebound ahead Of Nvidia's Earnings

Falling oil prices have also helped lower Treasury yields, with the 30-year posting a 5.6-basis-point drop to 5.175%. The 10-year is down 6.3 bps to 4.641%. Lower yields are generally viewed as a positive factor for stocks because they reduce borrowing costs and make equities more attractive relative to bonds.

Meanwhile, AI stocks are rebounding following losses earlier this week. AMD (AMD), Intel (INTC), and Marvell (MRVL) are all posting notable gains. The sector will receive a major catalyst on Wednesday when Nvidia (NVDA) reports its earnings after the market close.