Oil Price Decline Eases Bond Market Worries, Supports Stock Prices

Oil prices took another drop on Tuesday, helping to ease concerns in the bond market and support stock prices. The S&P 500 rose 0.3% and edged closer to its all-time high set earlier this month, while the Dow Jones Industrial Average added 160 points or 0.3%. The Nasdaq composite climbed 0.7%, with Nvidia leading the way after a 2.2% gain.

The price for a barrel of Brent crude fell 3.6% to $87.27, its second decline in two days following 13 gains in 14 days. Despite rising tensions between the US and Iran, the drop in oil prices helped calm worries about high inflation, which had driven Treasury yields higher through the summer.

The yield on the 10-year Treasury fell to 4.63% from 4.70% late Monday and from 4.74% at the end of last week, a significant move for the bond market. However, the 10-year yield remains firmly above its pre-war level of 3.97%.

On Wall Street, chip stocks like Nvidia helped offset a 30.7% plunge for Dick's Sporting Goods, which reported weaker results than analysts expected. The retailer cut prices on some footwear and apparel to remain competitive but saw launches for some footwear end up being weaker than expected.