US stocks near record highs as oil prices retreat

U.S. stocks rose Tuesday, edging closer to record highs as oil prices retreated from recent peaks. The S&P 500 gained 0.8%, poised to surpass its August high, while the Dow Jones Industrial Average climbed 0.5% and the Nasdaq composite added 0.8% after its own record-setting day. Brent crude oil, the global benchmark, dropped 2% to $98.30 per barrel, easing inflationary pressures and relieving some bond market tensions. The yield on the 10-year Treasury dipped to 5.25% from 5.31%, offering some respite from elevated borrowing costs.

Constellation Energy surged 13% after striking a long-term deal to supply Google with electricity equivalent to a new nuclear reactor. The AI-driven demand for data centers is boosting energy needs and related economic activity. Option Care Health soared 32.7% following a $5.8 billion acquisition by CD&R and McKesson, which agreed to pay $32.05 per share. McKesson's shares rose slightly by 0.2%. Lamb Weston, a frozen potato products company, reported stronger-than-expected quarterly profits and revenue, sending its stock up 10.8%. CEO Mike Smith noted persistent inflation challenges but raised annual profit forecasts.

Earnings season is in focus, with Delta Air Lines set to report Q3 results on Friday and major banks following next week. Analysts project a third consecutive quarter of over 25% profit growth for S&P 500 companies. Abroad, European markets inched higher amid bond yield volatility and fiscal concerns, while Asian markets showed mixed performance with Japan and Hong Kong gaining, and South Korea declining. Protests in France over education funding also made headlines.