Oil Price Drop Calms Bond Market and Supports Stocks

Oil prices dropped for a second consecutive day on Tuesday, which had a calming effect on the bond market and supported stock prices. The S&P 500 rose 0.3% and edged closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 160 points, or 0.3%, and the Nasdaq composite climbed 0.7%. In the oil market, Brent crude fell 3.6% to $87.27, despite tensions between the US and Iran escalating after new sanctions were announced.

The drop in oil prices helped alleviate concerns 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.

Nvidia and other AI stocks led the way in gains on Wall Street, with Nvidia rising 2.2%. However, Dick's Sporting Goods reported weaker results for its latest quarter than analysts expected, leading to a 30.7% plunge in its stock price.