Oil Price Drop Calms Bond Market Worries, Boosts Stocks

Oil prices dropped for a second day on Tuesday, helping to ease concerns in the bond market and boost stock prices. The S&P 500 rose by 0.3%, bringing it 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%. The price of Brent crude fell 3.6% to $87.27, despite increased tensions between the US and Iran.

The drop in oil prices helped calm worries about high inflation, which had been driving Treasury yields higher in the bond market. Yields had gotten so high that the US Treasury Department announced a surprise move last week to increase its repurchases of longer-term Treasury 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, helped lead the way in gains for chip stocks. Nvidia rose by 2.2%, a day after its drop of 2.9% was the heaviest weight on the S&P 500. AI stocks have been volatile through the summer, with prices shooting up and then falling due to concerns about sustainability.