S&P 500 and Nasdaq Reach New Highs as Dow Jones Climbs

The S&P 500 and Nasdaq Composite hit new all-time highs, while the Dow Jones Industrial Average posted modest gains. The rally was fueled by falling oil prices, easing Treasury yields, and strong performance from AI-driven stocks. The S&P 500 rose roughly 0.5%, 0.7%, peaking above 7,830, while the Nasdaq advanced about 0.6% after closing at a record on Monday. The Dow Jones gained around 0.4%, though it remained below its August high.

Oil prices played a key role in the market's movement, with Brent crude dropping more than 2% to around $98 per barrel. This decline helped alleviate concerns about elevated energy prices prolonging U.S. inflation. The reduction in oil prices also eased pressure on Treasury markets, where yields had surged earlier in the week. The 10-year Treasury yield pulled back after reaching roughly 5.31% on Monday, a level that had posed challenges for growth stocks.

Despite typically high bond yields, the Nasdaq continued to set records due to strong earnings growth from AI-linked companies. Investors are also anticipating another robust earnings season, with analysts expecting third-quarter S&P 500 profits to rise roughly 27% year over year. Major contributors to this growth include Nvidia, Meta, Alphabet, and other AI-related firms, reinforcing the ongoing rally in tech stocks.