The Nasdaq, S&P 500, and Dow Jones Industrial Average inched higher on Tuesday as investors eagerly awaited the quarterly results of Nvidia. The anticipation of Nvidia's (NVDA) earnings announcement tomorrow contributed to the positive market sentiment.

Early on, the Nasdaq Composite remained flat, while the S&P 500 and Dow Jones registered gains of 0.1% each. Meanwhile, the 10-year Treasury yield dropped by 4 basis points to 4.40%, and the 2-year yield decreased by 3 basis points to 4.81%.

Investors have closely observed the mixed performance of the major market averages during Monday's trading session. However, the market appears to be focusing on accommodative financial conditions, resilient growth, a positive earnings season, declining inflation, and the Federal Reserve's potential rate cuts, which are expected to be delayed instead of canceled, according to Deutsche Bank's Jim Reid.

Reid also noted that investors have grown more optimistic about a soft landing for the economy in recent weeks, following initial doubts in April.

Tomorrow, Nvidia is set to release its first-quarter results after the closing bell, which has heightened interest from market participants. In addition to Nvidia's earnings announcement, a series of Fed officials, including Richmond Fed President Tom Barkin, Fed Governor Christopher Waller, Atlanta Fed President Raphael Bostic, and Fed Vice Chair for Supervision Michael Barr, are scheduled to speak today.

In the wake of the recent Consumer Price Index (CPI) data, the U.S. market has scaled back its repricing of rate expectations, with the assistance of Fed officials' warnings about the uncertainty surrounding the inflation outlook. This has led many to believe that the Fed will maintain interest rates on hold until the economic outlook becomes clearer.

Commenting on the situation, Kit Juckes, an FX strategist at Societe Generale, summarized the market sentiment by stating that "inflation should come down, but we're not sure when." Juckes added that the Fed's response is to adopt a wait-and-see approach, while the market will continue to closely monitor the incoming data.

As investors eagerly await Nvidia's earnings results and keep an eye on the statements of Fed officials, the overall market remains cautiously optimistic, drawing from positive economic indicators and the potential for accommodative monetary policies.