Oil Price Drop Brings Calm to Markets Amid Inflation Worries

Falling oil prices have brought some calm to the stock and bond markets, which had been worried about inflation. The S&P 500 rose 0.3% on Tuesday, getting closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 160 points, or 0.3%, while the Nasdaq composite climbed 0.7%. Oil prices fell for a second day in a row, with Brent crude dropping 3.6% to $87.27 per barrel.

The drop in oil prices helped ease concerns about high inflation, which had driven up Treasury yields through the summer. Yields on long-term bonds have been high enough that the U.S. Treasury Department announced last week it would increase its repurchases of longer-term notes and bonds. The yield on the 10-year Treasury fell to 4.63% from 4.70% late Monday.

Nvidia, a leader in artificial-intelligence technology, led the way for chip stocks, rising 2.2%. However, Dick's Sporting Goods plummeted 30.7%, its worst drop on record, after reporting weaker results than expected. The company cut its forecast for profit and announced it would spend $2.4 billion to acquire Foot Locker last year.