Stocks Rise Near Records as Oil Prices Ease Inflation Pressures

U.S. stock markets are showing gains on Tuesday, with major indexes nearing all-time highs as oil prices retreat from recent peaks. The S&P 500 rose 0.8%, on track to surpass its August record, while the Dow Jones Industrial Average climbed 265 points, or 0.5%. The Nasdaq composite added 0.8% after setting its own record the day before.

The decline in Brent crude oil prices, which dropped 2% to $98.30 per barrel, eased some inflationary pressures. This drop, from nearly $110 a few weeks ago, helped calm tensions in the bond market, where the yield on the 10-year Treasury fell slightly to 5.25%. Higher yields have been slowing economic activity by increasing borrowing costs and reducing investor appetite for stocks.

Notable stock movements included Constellation Energy, which surged 13% after announcing a long-term deal to supply electricity to Google. The growing demand for data centers driven by artificial-intelligence technology has boosted demand for electricity and construction materials. Option Care Health soared 32.7% after a $5.8 billion acquisition deal by CD&R and McKesson.

Strong corporate profits have supported the market rally despite high inflation, expensive oil, and bond market worries. Lamb Weston, a frozen food company, reported better-than-expected quarterly profits and revenue, leading to a 10.8% stock rally. Analysts expect S&P 500 companies to report a third straight quarter of over 25% profit growth. Delta Air Lines and major banks are set to release earnings reports in the coming days.

Internationally, European markets saw modest gains amid bond market volatility, while Asian markets showed mixed results. Japan’s Nikkei 225 jumped 1.1%, and Hong Kong’s Hang Seng climbed 1%, but South Korea’s Kospi fell 0.9%.