Stocks Rise as Oil Prices Drop and Bond Yields Fall
US stock indexes rose today, with the S&P 500 gaining +0.75%, the Dow Jones up +0.53%, and the Nasdaq 100 climbing +0.83%. The gains came as crude oil prices fell more than -1% to a 1-month low, easing inflation concerns and lowering bond yields. The 10-year Treasury yield dropped -3 basis points to 5.28%, supporting stock gains. The decline in oil prices was driven by increased supplies from the Middle East, particularly from Kuwait and Iraq.
Technology stocks, including the Magnificent Seven, led the market higher, with Amazon, Nvidia, and Microsoft each rising more than +1%. Cybersecurity stocks also performed well, with Zscaler up more than +4% and Palo Alto Networks and Crowdstrike each gaining more than +3%. Airlines and cruise operators benefited from lower fuel costs, with Norwegian Cruise Line rising more than +4% and United Airlines up more than +3%.
Despite the positive market sentiment, economic data was bearish for stocks. The August trade deficit widened to a 17-month high of -$105.6 billion, exceeding expectations and potentially impacting Q3 GDP. Overseas, European and Asian markets also showed gains, with the Euro Stoxx 50 up +0.26% and Japan's Nikkei-225 soaring to a 3-month high. The 10-year German bund yield and UK gilt yield both declined.
Notable individual stock movers included Option Care Health, which surged more than +32% after announcing a $5.8 billion acquisition deal. Apogee Enterprises rose more than +13% after boosting its earnings forecast, and Constellation Energy gained more than +12% following a long-term deal with Google. Conversely, Vaxcyte fell more than -10% after announcing a $500 million share offering.