Wall Street gains as Treasury yields and oil prices retreat
Wall Street kicked off the week with strong gains on Tuesday, as Treasury yields retreated from multi-year highs and oil prices pulled back. The Dow Jones Industrial Average surged 227 points, while the S&P 500 and Nasdaq Composite rose 0.49% and 0.57%, respectively. The S&P 500 even surpassed its previous all-time high, reaching 7,817.13 points, while the Nasdaq closed at a record high on Monday, boosted by gains in tech stocks, particularly those focused on artificial intelligence.
Technology stocks led the charge on Tuesday, with Nvidia climbing 0.9% and nearing a market value of $6 trillion. Advanced Micro Devices (AMD) edged up 0.12% after CEO Lisa Su announced plans to significantly boost chip supply by 2027 to meet rising AI demand. Other major tech players, including Meta, Tesla, and Amazon, also saw gains. The sector has been a key driver of U.S. equity outperformance over the past six months, despite higher energy prices and bond market volatility.
Investors are now preparing for the third-quarter earnings season, with major U.S. banks set to report next week. Analysts anticipate S&P 500 earnings to jump over 30% year-over-year, largely fueled by AI-related companies. Meanwhile, the 10-year Treasury yield dipped 3 basis points to 5.29%, and the 30-year yield fell over 2 basis points to 5.66%. A weaker-than-expected U.S. payrolls report last week lowered expectations for a Fed rate hike in October, though a December increase remains likely.
Oil prices also declined, supporting equity gains. Brent crude fell 2.3% to around $98 per barrel, while West Texas Intermediate dropped 1.49% to roughly $88. The drop followed an increase in Middle Eastern crude exports and the G7’s decision to release emergency stockpiles, easing supply concerns. Additionally, Option Care Health soared 32.8% after a $5.8 billion acquisition deal, and Constellation Energy rose 12.7% following a major power agreement with Google.