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The S&P 500 closed sharply higher, led by Nvidia as investors swooped in on tech just as the third-quarter earning season got underway.

At 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average rose 126 points, or 0.3%, the S&P 500 climbed 1%, and the NASDAQ Composite gained 1.4%.

Nvidia powers tech; DocuSign set to join S&P 500 MidCap 400 index

NVIDIA Corporation (NASDAQ:NVDA) led the broader tech sector higher on optimism about the chip demand outlook after Foxconn chairman Young Liu stated that demand for Foxconn servers powered by Nvidia’s upcoming Blackwell chip is "much better than we thought."

Alphabet (NASDAQ:GOOG) was marginally higher, a day after its Google unit was ordered by a US judge to reconfigure its Android operating system to allow rivals to create their own app marketplaces and payment options, marking a setback for the tech giant's defense against antitrust claims.

DocuSign Inc (NASDAQ:DOCU) is set to join the S&P 500 MidCap 400 index on Friday, replacing MDU Resources, sending its shares more than 6% higher.

PepsiCo kicks off Q3 earnings season; Honeywell spin-off plans delight; Roblox targeted in short seller report

PepsiCo (NASDAQ:PEP) stock rose 1.9% after the soft drinks giant reported third-quarter earnings that beat expectations, but its revenue fell short as the company faced subdued category performance in North America and international business disruptions.

Honeywell (NASDAQ:HON) stock rose more than 1% after the Wall Street Journal reported that the conglomerate is planning to spin off its Advanced Materials business.

Roblox Corp (NYSE:RBLX) fell more than 2% after short seller Hindenburg Research accused the online gaming company of inflating key metrics including active users and user engagement hours on its platform.

Fed speakers out in force

There is little economic data due Tuesday to influence interest rate expectations, although the minutes of the September meeting are expected on Wednesday and the September consumer price index on Thursday, with investors watching for any signs of persistent inflation.

Fed speakers continue to discuss the rate outlook. Boston Federal Reserve President Susan Collins stated that further rate cuts will likely be needed as inflation continues to fall, while Atlanta Fed President Raphael Bostic noted that strength in the labor market points to ongoing economic resilience.

Traders are currently pricing in an 80.9% chance that the Fed will cut rates by 25 basis points in November, with a 19.1% chance that the central bank will not cut rates at all, according to CME Fedwatch.

Traders are also anticipating a higher terminal rate for the Fed’s current easing cycle. The central bank cut rates by 50 bps in September and announced the beginning of an easing cycle, but flagged a data-dependent approach to future rate cuts.

(Peter Nurse, Ambar Warrick contributed to this article.)