U.S. stocks moved higher on Tuesday, with the S&P 500 reaching a fresh intraday record for the first time since mid-August.
The rally extended last week’s gains as renewed enthusiasm around artificial intelligence helped investors look past the sharp sell-off in U.S. Treasuries seen in the previous session.
By 12:52 ET, the S&P 500 had gained 0.8% to 7,832.35 points. The Nasdaq Composite rose 0.7% to 27,661.41, also trading at a record level.
The Dow Jones Industrial Average advanced 0.6% to 51,555.81.
Wall Street Bull Market Approaches Four Years
U.S. equities have rebounded strongly at the start of October following a relatively quiet September.
Investor sentiment has remained resilient despite several challenges, including the recent Treasury bond rout, geopolitical uncertainty and concerns over inflation.
Support has come from renewed strength in AI-related stocks and a generally solid corporate earnings outlook.
The S&P 500 has risen during every trading session in October so far, helping the index return to record territory.
Softer Jobs Data Boosts Fed Rate Hopes
The latest rally gained momentum after September employment data showed weaker-than-expected U.S. job growth.
The report encouraged investors to reduce expectations for an immediate Federal Reserve interest rate increase.
Lower oil prices have also helped ease some concerns over energy-driven inflation.
As a result, markets increasingly expect the Fed to leave rates unchanged this month before potentially raising borrowing costs in December.
Bull Market Gains Reach 118%
October also marks nearly four years since the current Wall Street bull market began in 2022.
According to Carson Group chief market strategist Ryan Detrick, the rally is now the eighth-longest bull market since World War II.
The market has gained roughly 118% over that period.
Detrick noted that this represents the third-strongest start to a bull market on record.
Mega-Cap Tech Continues to Lead
Despite the S&P 500 returning to record highs, the rally has not been evenly distributed across the market.
Much of the strength has come from the Magnificent Seven and other large technology companies.
More cyclical parts of the market have faced deeper declines as investors react to higher yields, rising fuel costs and weaker economic data.
Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research, said mega-cap stocks have helped keep the headline S&P 500 relatively stable even as many individual stocks have experienced sharper corrections.
The average S&P 500 member has suffered a maximum drawdown of around 14% since early August.
Earnings Season Could Shift Investor Focus
The upcoming U.S. earnings season could help investors move their attention away from macroeconomic concerns.
Major banks, including JPMorgan and Bank of America, are scheduled to report results next week.
Strong earnings could provide additional support for equities.
However, analysts also believe that lower volatility in bond and oil markets would improve conditions for stocks.
Treasury Bond Sell-Off Pauses
Wall Street also benefited on Tuesday from a pause in the recent U.S. Treasury sell-off.
The benchmark 10-year Treasury yield fell 4.1 basis points to 5.272%.
The 30-year Treasury yield declined 2.4 basis points to 5.640%.
Both yields recently reached their highest levels since early 2002.
The recent bond market weakness has been driven by concerns about inflation, rising government debt and large amounts of corporate borrowing linked to AI infrastructure investment.
Hawkish central banks and volatility in European bond markets have added further pressure.
Bond Volatility Remains a Key Risk
Gordon highlighted that the speed of changes in bond yields may be more important for stocks than the absolute level of yields.
The ICE BofA MOVE Index, often described as the bond market’s equivalent of the VIX, has shown elevated volatility.
A decline in rate volatility, combined with stronger corporate earnings, could help support equities further.
Oil Prices Remain Relatively Stable
Oil prices were also subdued on Tuesday.
Shipping data showed that Gulf oil exports exceeded pre-war levels during roughly half of September.
The improved supply outlook has been reinforced by plans from Group of Seven countries to release emergency energy reserves.
Lower oil prices could help reduce inflation pressure and support expectations for a more patient Federal Reserve.
Skydance Shares Fall After Major Merger
Among individual stocks, Skydance fell nearly 6% on its first trading day following the completion of Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery.
The deal combines major film studios, streaming platforms, television networks and news businesses including CBS News and CNN.
Skydance CEO David Ellison said the company is now focused on building a stronger entertainment business for creators, audiences and shareholders.
The transaction closed after receiving regulatory approval across nearly 70 global jurisdictions.
Constellation Energy Surges on Google Deal
Constellation Energy was another major mover, with shares jumping almost 15%.
The company announced a 20-year power purchase agreement with Alphabet’s Google.
Under the deal, Constellation plans to add 890 megawatts of new nuclear capacity to the PJM Interconnection grid.
The agreement highlights growing demand for reliable electricity as technology companies expand AI data centers and computing infrastructure.
Overall, Wall Street remains supported by AI enthusiasm, easing rate-hike expectations and a temporary stabilization in bond and oil markets. However, investors will continue watching Treasury yields, inflation and corporate earnings for clues about whether the rally can continue.
