Global: The S&P 500 and Nasdaq Composite reached record highs on Tuesday, supported by easing Treasury yields, falling oil prices and renewed optimism around artificial intelligence stocks ahead of the US quarterly earnings season.
Most of the so-called Magnificent Seven stocks gained, with Meta, Tesla, Amazon and Microsoft rising between 0.5% and 1.7%.
Nvidia climbed 1.1%, pushing the market value of the world’s most valuable company closer to the $6 trillion mark.
AI Optimism Supports US Stocks
Investor enthusiasm over the AI sector and expectations of strong corporate earnings have helped extend the US stock market’s bull run, which began in October 2022.
David Miller, chief investment officer at Catalyst Funds, said the US economy had remained more resilient than expected and corporate earnings continued to be strong, although higher interest rates were becoming a growing challenge for investors.
Government bond yields eased across maturities, with the benchmark 10-year Treasury yield falling 5.3 basis points.
Fed Rate Outlook Remains in Focus
A weaker payrolls report last week reduced expectations of an interest rate hike in October.
According to the CME Group’s FedWatch tool, traders were pricing in nearly a 79% probability of the Federal Reserve keeping rates unchanged in October, while a December rate hike remained largely priced in.
At least four Federal Reserve officials, including New York Fed President John Williams, were also scheduled to speak publicly on Tuesday.
All 11 S&P 500 sectors were trading higher, led by utilities and real estate.
Major US Indexes Rise
At 11:33am ET, the major indexes were trading as follows:
- Dow Jones Industrial Average: Up 359.08 points, or 0.70%, at 51,626.98
- S&P 500: Up 66.16 points, or 0.86%, at 7,840.66
- Nasdaq Composite: Up 228.58 points, or 0.83%, at 27,705.89
Oil Prices Fall Around 2%
Oil prices declined around 2%, as continued Middle Eastern crude exports and the release of emergency stockpiles by G7 countries eased concerns over global supply.
Meanwhile, investors are preparing for the third-quarter earnings season, which begins next week. Analysts expect S&P 500 earnings to rise by more than 30% year-on-year, largely driven by companies benefiting from the AI boom.
Chip Stocks Lead Corporate Movers
Several technology and energy-related companies recorded strong gains.
Marvell Technology rose 6.5% after increasing its 2028 revenue forecast to around $20 billion, citing strong demand for data-centre chips.
AMD gained 3.6% after CEO Lisa Su said the company planned to significantly increase chip supplies in 2027 to meet growing AI demand.
Constellation Energy was the S&P 500’s strongest performer, surging 13.9% after Google entered a 3,590-megawatt power agreement with the company.
Option Care Health jumped 32.7% after McKesson and private equity firm Clayton Dubilier & Rice agreed to acquire the infusion therapy provider in a deal valued at about $5.8 billion, including debt.
Advancing stocks outnumbered declining shares by 2.93 to 1 on the NYSE and 1.72 to 1 on the Nasdaq.
The S&P 500 recorded 21 new 52-week highs and one new low, while the Nasdaq Composite posted 48 new highs and 123 new lows.
