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The S&P 500 rose to a fresh all-time intraday high on Tuesday, boosted by gains in key technology names as well as declines in Treasury yields.
The broad market index climbed 0.58% for a record close of 7,818.93, while the Dow Jones Industrial Average gained 253.38 points, or 0.49%, to end at 51,521.28. The Nasdaq Composite added 0.45% and closed at a record 27,599.79. The tech-heavy index hit a new all-time high during the session as well.
The moves higher were bolstered by a rise in chipmakers. Marvell Technology popped 5.8%, and Advanced Micro Devices gained nearly 3%, as investors grew optimistic about the companies' outlooks. Others such as Broadcom advanced 3.7%.
"Everyone's like markets are up. AI is the place to be," said Stephen Kolano, chief investment officer at Integrated Financial Partners. Investors are "looking through the inflation concerns right now, especially as it relates to oil, diesel, etc. It's like 'Okay, that's something that potentially gets resolved in the future.'"
Oil prices ended the day little changed. Brent crude traded 0.26% higher to settle at $100.58 per barrel. West Texas Intermediate futures rose just 0.01% to $89.44 a barrel.
Kolano also said that interest rates are "fundamentally kind of where they need to be." The benchmark 10-year Treasury note yield fell 3 basis points to 5.281%, while the 30-year bond yield was last little changed at 5.655%. Both scaled to levels not seen since 2002 on Monday.
"People are looking for where might there be some source of contagion that starts to spread, but right now, it's all staying well contained and just being dominated by the momentum, the earnings growth, the investment coming from artificial intelligence," he added.
Traders are now looking ahead to the Federal Reserve's minutes from its September meeting due Wednesday, which could shed some light on policymakers' move to raise rates.
The S&P 500 and Nasdaq Composite finished at closing records.
The broad market index and the tech-heavy Nasdaq rose 0.58% and 0.45% to 7,818.93 and 27,599.79, respectively. The Dow Jones Industrial Average, meanwhile, climbed 253.38 points, or 0.49%, to 51,521.28.
The Treasury market could face more disruption this year if demand from China and Japan pulls back, Ray Dalio told Bloomberg Tuesday.
"They are starting to get squeezed," the founder of Bridgewater Associates said.
Japan has lent a lot of money to change their economic policy, he said. "Now they want to take back some of that money."
On top of economic issues, there are also geopolitical ones, Dalio noted.
"The Chinese don't want to continue to accumulate," he said. "When you have a debtor-creditor relationship and you have an adversary relationship, that's a very difficult dynamic."
The grieving process over the fate of the AI trade has begun, according to famed investor Michael Burry.
"The stock market is quite obviously in its first stage of grief, denial. Per 2000 and 2008, this stage lasts 6-9 months," he wrote in a social media post on Tuesday.
Burry is famous for shorting the housing market prior to the great financial crisis of 2007 to 2009, and he's current shorting a number of companies involved with AI.
Recently, Burry took issue with GPU maker Nvidia's depreciation schedule, calling it an "admission of the dramatic cost" of the company's product cycle and a "gift to bears." He also thinks institutional lenders supplying the technology industry with loans could be in for a rude awakening.
Here are some of the companies making headlines in midday trading:
Wall Street is getting more bullish on SpaceX.
Analyst Eric Sheridan at Goldman Sachs put a $230 price target and a buy rating on the stock in a Monday note to clients, implying upside of 44.7%.
He thinks the company is set to make more money from its artificial intelligence divisions than Wall Street currently expects.
"AI segment estimates still look relatively conservative (relative to Street estimates) over the next 6 to 18 months absent a correction across the broader AI operating landscape," he wrote.
Small-cap stocks underperformed on Tuesday as the three major averages saw sizable gains.
The Russell 2000 index was last trading just above the flatline, while the S&P 500 rose 0.8%. The Nasdaq Composite, which hit a new record high alongside the S&P 500 during the session, was higher by 0.8% as well, and the Dow Jones Industrial Average climbed 338 points, or 0.7%.
David Ellison's Paramount Skydance closed on its $110 billion purchase of Warner Bros. Discovery Tuesday, putting an end to a year-long takeover struggle that eventually entangled the future of film and television production in southern California, CBS News, CNN and settlement of a suit by attorneys generals from 12 states.
The new, successor company is named Skydance Corp. and, like its predecessor, trades on Nasdaq under ticker SKYD. Skydance joins two of the most stories film studios in Hollywood history, Paramount and Warner Brothers, as well as control of some one-third of basic cable programming.
Skydance shares fell another 2% in early trading Tuesday, bringing its 12-month loss to 50%.
Bond yields may peak in the next month, Apollo Global Management chief economist Torsten Slok wrote Tuesday, citing "several forces" that suggest a top between now and early November, among them the increased odds of some sort of resolution in the Middle East ahead of the Nov. 3 midterm elections in the U.S.
Other signals include the move by the U.S. and European allies to release additional oil supplies, putting further downward pressure on crude oil prices, and harm being inflicted on the housing and auto industries by higher interest rates.
Slok said that 84% of global fixed income now yields more than 3%, "up from just 12% in January 2022." Any deal "or government action that lowers oil prices would ease the upward pressure on interest rates at a time when yields are already elevated across nearly the entire global bond market," he said.
David Rosenberg of Rosenberg Research in Toronto, a former chief North American economist at Merrill Lynch, said bond pressures are easing Tuesday as oil prices fall another 1% and European bond prices rally, noting that earlier in the day benchmark yields on Italian government debt dropped 11 basis points to 4.52%, in France by 10 bps to 4.76% and in the U.K. by 6 bps to 5.36%.
Shares of Marvell Technology jumped more than 7% in morning trading on Tuesday after the company provided long-term revenue guidance at its Investor Day.
Marvell expects its revenue for fiscal 2028 to come in at $20 billion, above the $18.17 billion that analysts polled by FactSet were looking for.
Looking out even further, the company sees its revenue being between $70 billion and $90 billion in fiscal 2031. That's well above the consensus estimate of $47.04 billion.
The latest move in the stock puts its year-to-date surge at more than 242%.
The S&P 500 and Nasdaq Composite traded at record levels on Tuesday morning.
The broad market index rose 0.5% shortly after the opening bell, while the Nasdaq Composite gained 0.6%. The Dow Jones Industrial Average climbed 189 points, or 0.4%.
If the S&P 500 ends the day above 7,798.99, it would post a new record close.
The U.S. trade deficit widened to levels not seen since before President Donald Trump's sweeping tariffs announcement early last year.
The deficit came in at $105.6 billion in August, the Commerce Department reported Tuesday. That's the largest amount since March 2025, when the deficit was at $132.98 billion, and was above the $102 billion that economists polled by the Dow Jones expected.
The dollar index also hit its low of the session at 101.754, marking its lowest level since Oct. 2, when the index hit a low of 101.668
Private equity firm Clayton, Dubilier & Rice (CD&R) and McKesson Corporation have signed an agreement to acquire home infusion provider, Option Care Health.
The companies will pay $32.05 per share in cash, reflecting a total enterprise value of approximately $5.8 billion.
At the closing of the transaction, CD&R will hold a majority ownership interest, while McKesson will hold a minority ownership interest. Option Care Health will remain a separate entity with its own management team.
The transaction aligns with McKesson's strategic objectives, increasing its exposure to specialty and outpatient care, areas that have become increasingly important as more complex treatments shift outside hospitals.
Check out the companies making headlines before the bell:
Shares of Google-parent Alphabet rose 0.6% after the company announced a nuclear power deal with Constellation Energy, which traded 6% higher on the news. As part of the 20-year deal, Google will purchase 890 megawatts of nuclear energy as it expands its AI capabilities.
AMD shares were up more than 1% after Citi raised its price target on the chipmaker to $800 from $575, implying upside of 27% from Monday's close. Analyst Atif Malik said the CPU market could balloon to $300 billion by 2030 as computing demand from Meta's Muse AI agent grows.
"In Agentic AI, CPUs have become the new bottleneck," Malik said. "Following the release of Meta Muse and our subsequent CPU TAM raise, we are raising estimates on AMD given our belief that AMD will be the primary beneficiary of the CPU renaissance and our belief that Meta is one of the largest customers of AMD's server business."
Government borrowing costs pulled back on Tuesday following a global sell-off that has pushed benchmark bond yields in major economies to their highest level in decades.
The yield on German 10-year bunds, the euro area benchmark, was down 5 basis points at 4:30 a.m. ET. The French 10-year yield, which has come under severe pressure this year amid concerns about France's debt and fiscal spending, was down 9 basis points.
Japan's 10-year yield dipped 1 basis point, while the 10-year Treasury yield eased 5 basis points.
The U.K. is "on thin ice" ahead of its critical Autumn Budget, according to a former chief economist of the Bank of England, who warned the government must curb public spending and refrain from painful tax hikes.
Speaking to CNBC's Steve Sedgwick, Andy Haldane — a member of the central bank's Monetary Policy Committee until 2021 — said there were "perils" running into the budget update, currently scheduled for Oct. 28.
"The truth is we are skating on pretty thin ice in fiscal terms, and nothing would be worse both economically and politically than if the ice were to crack beneath our feet," Haldane said on the sidelines of the How Britain Can Win conference, hosted by Goldman Sachs 10,000 Small Businesses UK.
Asia markets closed mostly higher Tuesday.
Japan's Nikkei 225 rose 1.05% to end the trading day at 70,683.98, while the broader Topix added 0.92% to 4,183.56.
South Korea's Kospi fell 0.89% to 6,941.39 while the small-cap Kosdaq gained 2.98% to 919.92.
Australia's S&P/ASX 200 advanced 0.57% to 8,735.7.
Mainland China markets remained closed for a holiday.
European stock markets saw a buoyant open, with the Stoxx 600 index up 0.46% and almost all sectors in the green, continuing positive momentum in the previous two sessions.
Health-care stocks led gains, up 1.36%, while oil and gas shares fell 0.2% amid signs of resilience in Middle East crude exports.
President Donald Trump has allowed the use of cheaper red-dyed diesel, typically reserved for farm operations, to be used more broadly in an attempt to bring down record-high fuel costs.
Trump signed an executive order Monday evening stateside to temporarily allow truckers and farmers to use red-dyed diesel — which is exempt from highway fuel taxes — and deferred related taxes on the fuel through the end of this year.
BPCE has acquired a 7% stake in Spanish lender Banco de Sabadell, France's second-biggest banking group said Tuesday, adding that it planned to seek representation on Sabadell's board and cap its shareholding at 9.9%.
A release said the banks wanted to "underline the friendly nature of this equity investment," which comes as the European banking sector undergoes a wave of consolidation — including an ongoing play by Italy's UniCredit for Germany's Commerzbank.
Sabadell, the fourth-largest Spanish bank which recently sold British lender TSB to Santander, was the subject of a failed hostile takeover bid by its domestic rival BBVA last year.
BPCE and Sabadell "intend to explore business cooperation opportunities, in particular in corporate and investment banking, equipment leasing, consumer credit, and cross-border clients business," they said in a statement.
"While BPCE has stated it does not intend to increase its holding above 9.9%, we think this may increase debate on future industry consolidation in Spain," Citi analysts said Tuesday, noting that the country may be heading for a new political backdrop after parliamentary elections were called on Monday for November.
The benchmark 10-year Treasury yield was flat at 5.315% while the 30-year yield climbed 1 basis point to 5.674%.
Jobs data has prompted traders to pare expectations for another Federal Reserve rate hike this month, but BMO's Ian Lyngen said longer-dated Treasurys remain under pressure from broader concerns over government borrowing and fiscal sustainability, with recent weakness in French sovereign debt spilling over into U.S. rates.
"Whether it is France, the US, Japan, or the UK, there has been a persistent theme of worry that government deficit spending will eventually lead to a reckoning for sovereign debt markets," BMO's Ian Lyngen wrote in a note late Monday, adding that demand for Treasury supply remains "an open question."
Yields on the 10-year Japanese government bond were also hovering around their highest since 1996, adding around 1 basis point to 3.101%
Oil rose early Tuesday, as investors continue to assess developments in the Middle East amid concerns over supply disruptions.
Futures for international benchmark Brent crude for December delivery gained 0.42% at $100.74 a barrel. U.S. West Texas Intermediate futures for November added 0.32% at $89.72 per barrel.
Saudi Aramco's chief executive Amin Nasser said Monday that global oil stockpiles could take two years to rebuild. The squeeze on supplies could yet get worse as the Iran-U.S. conflict drags on, Nasser cautioned.
"Oil remains caught between a still-elevated geopolitical premium and growing expectations that supply conditions could become less restrictive," said Naeem Aslam, chief investment officer at Zaye Capital Markets.
Foxconn shares rose as much as 4% Tuesday morning after the company reported September revenue of 1.16 trillion New Taiwan dollars ($36.5 billion), its highest on record and the first time the figure has topped NT$1 trillion.
The company's third-quarter revenue came in at NT$3.03 trillion, up 47.12% from a year earlier.
Foxconn attributed the strong performance to growth across its smart consumer electronics, components and other products, cloud network products, and computing products businesses.
Asia markets opened mostly higher Tuesday. Japan's Nikkei 225 rose 0.22% at the open, while the broader Topix added 0.26%. South Korea's Kospi was 0.15% lower, while the small-cap Kosdaq gained 1.91%.
Mainland China markets remain closed for a holiday.
Asian stocks were poised to open higher Tuesday, tracking gains on Wall Street as AI-linked stocks powered the Nasdaq Composite to a fresh record high, even as U.S. Treasury yields remained elevated.
Japan's Nikkei 225 was set to rise at open, with its Chicago and Osaka futures contracts last at 70,220 and 70,180 respectively, compared with the index's previous close of 69,946.86.
Futures for Hong Kong's Hang Seng index stood at 24,266, higher than its last close of 24,040.34.
Australia's S&P/ASX 200 added 0.38% at the open.
The tech sector of the S&P 500 ended Monday's trading at a record close.
Information technology jumped 0.7% in the session as investors snapped up shares of companies tied to the artificial intelligence trade. Memory stocks Western Digital and Seagate Technology rose 6% and 4%, respectively. Nvidia added 2%, as did Broadcom.
The gains come at a time when tech continues to dominate the overall market. The Invesco S&P 500 Equal Weight ETF (RSP) is down 3.6% in the past month, while the S&P 500 has gained 0.7%.
U.S. equity futures were little changed on Monday. Futures tied to the Dow Jones Industrial Average added 47 points, or 0.09%. S&P 500 futures rose 0.1% and Nasdaq-100 futures climbed by 0.1%.