• Nvidia second-quarter results due after closing bell
• Dollar recovers even as Fed independence worries linger
• US stocks higher in afternoon trading

NEW YORK, Aug 27 (Reuters) - Major stock indexes rose on Wednesday ahead of results from artificial intelligence leader Nvidia(NVDA.O) , opens new tab, while the dollar recovered from the previous session's drop despite ongoing concerns about the U.S. Federal Reserve's independence.

A lawyer for Fed Governor Lisa Cook said she would file a lawsuit against U.S. President Donald Trump after he said he would fire her. Trump's statement left some investors worried about the independence of the U.S. central bank.

Sign up here.

Interest-rate sensitive two-year U.S. Treasury yields fell to an almost four-month low and the yield curve steepened as traders weighed the chance that Trump may be able to make more dovish appointments to the Fed.

Even so, the dollar rebounded from its drop in the previous session and was last up 0.36% at 147.93 Japanese yen , while the euro was down 0.48% at $1.1586.

The three major U.S. stock indexes were slightly higher, with Nvidia's second-quarter report, due after the closing bell, seen as a test of the AI optimism that has propelled markets over the past couple of years. This year, strong gains for a number of technology-related stocks exposed to AI have helped power major equity indexes to record highs.

"Trump has been on the Fed's back since Day One, and this (Cook firing) is just a continuation of that strategy. The market is completely focused, 100%, on Nvidia," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

Investors are wondering whether Nvidia's results will continue to live up to Wall Street's high expectations, he said. "My expectation is today it will."

Nvidia's shares were last down 0.1%. The company is expected to report that second-quarter revenue jumped to $46.06 billion, according to LSEG data, and investors will pay close attention to its business in China after the company agreed to pay the U.S. federal government 15% of the sales it made there in exchange for undefined export licenses.

Technology shares, including several AI leaders, with investors pointing to some signs of caution emerging in the sector.

The Dow Jones Industrial Average (.DJI) , opens new tab rose 190.54 points, or 0.42%, to 45,608.19, the S&P 500 (.SPX) , opens new tab climbed 20.02 points, or 0.31%, to 6,486.06 and the Nasdaq Composite (.IXIC) , opens new tab gained 55.61 points, or 0.26%, to 21,599.98.

European stocks rebounded slightly from the previous day's decline, with investors monitoring political risks in France. Concerns over a potential collapse of French Prime Minister Francois Bayrou's government next month sparked a selloff in French assets on Tuesday.

MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 1.64 points, or 0.17%, to 954.36. The pan-European STOXX 600 (.STOXX) , opens new tab index rose 0.1%.

Market watchers interpreted Fed Chair Jerome Powell's comments at the Fed's annual Jackson Hole symposium last week as indicating interest rate cuts could be on the way. Fed funds futures traders are pricing in 84% odds of a cut in September, according to the CME Group's FedWatch Tool.

But the outlook for U.S. interest rates will still likely depend on labor market strength and inflation trends.

The two-year note yield was last at 3.625%, down around five basis points on the day. The benchmark 10-year note yield fell to 4.236%, the lowest since August 14.

The yield curve between two-year and 10-year notes

Oil and gold prices rose. Oil gained on a larger-than-expected drop in U.S. crude inventories.

U.S. crude rose 90 cents to settle at $64.15 a barrel and Brent gained 83 cents to settle at $68.05.

Spot gold rose 0.09% to $3,395.33 an ounce.

https://www.reuters.com/world/china/global-markets-wrapup-5-2025-08-27/