Wall Street’s blue-chip index jumped more than 500 points on Tuesday as strong company earnings and a pullback in oil prices outweighed lingering anxiety about artificial intelligence stocks. Investors now face a Wednesday dominated by fresh tension in the oil market and a heavy run of technology results.
The Dow Jones Industrial Average gained 529.85 points, or 1.02%, to close at 52,495.88. The S&P 500 rose 0.28% to 7,712.57, while the Nasdaq Composite finished almost unchanged, down 0.02% at 26,424.82.
The S&P 500 had also finished higher on Monday, when the Nasdaq advanced more than 1%.
Earnings and oil lift the Dow
Upbeat quarterly reports did much of the work. Defence contractor Northrop Grumman rose more than 4% after beating forecasts. Healthcare, real estate and smaller company shares also outperformed, while technology stalled.
Oil gave investors some relief during the session. US West Texas Intermediate crude settled 1.8% lower at $101.79 a barrel and Brent fell 0.7% to $108.79, easing worries about inflation. Treasury yields slipped with it, and the 10-year yield dropped to about 5.09%.
Tech trades diverge
The picture was less comfortable in technology. AI-related shares have been under pressure recently, and last week’s sell-off left the Nasdaq down 4.5% for the week, its worst since late June. The Nasdaq’s flat finish on Tuesday showed buyers were selective rather than enthusiastic.
After the close, two high-profile results pointed in opposite directions. SpaceX shares jumped about 8% in after-hours trading after the company reported a 161% rise in quarterly revenue and its first profit as a listed company. Netflix, by contrast, fell roughly 5.8% as investors reacted to concerns about viewing engagement and future growth. The streamer said customer reaction to its recent price increases had been in line with expectations but acknowledged it needs to accelerate growth in viewing hours.
Attention now turns to Tesla and Meta Platforms, which both report after the US close on Wednesday. Meta is in particular focus because analysts expect it to raise equity to fund its AI spending, though the company has not announced an offering.
Oil climbs again
Tuesday’s relief looked fragile by Wednesday morning. Brent crude was quoted at $110.33 a barrel, up from about $106.65 at the London close the previous day, after Iran’s Revolutionary Guards said mines had halted three oil tankers in the Strait of Hormuz. Two of the vessels were set ablaze, the Guards said, and the third caught fire after striking a mine.
The Hormuz route normally carries around a fifth of the world’s oil. Tensions there have intensified in recent weeks, with at least 18 merchant ships reported attacked over a two-week period, according to Kpler data cited by Reuters. Brent has been trading near its highest level since May.
Bond markets remain sensitive to the oil price. Treasury yields touched 24-year highs earlier this month, and early on Wednesday the US 10-year yield edged up to 5.13% and the 30-year to 5.44%, levels that keep pressure on equity valuations. Gold eased to $4,121 an ounce from $4,131.
Asia and Europe
Asian markets were mixed. Japan’s Nikkei 225 gained 1.2%, while Hong Kong’s Hang Seng and the Shanghai Composite each lost 0.5%. Australia’s S&P/ASX 200 rose 0.2%.
In London, futures pointed to a slightly higher open for the FTSE 100, around 10,748, after it slipped 31.69 points to 10,733 on Tuesday. Sterling traded near $1.3376, and investors awaited UK inflation figures that went on to show a faster-than-expected rise to 3.5%.
What to watch
Traders will watch whether oil holds above $110 and whether yields keep climbing. Bond-futures pricing recently put the odds of an October Federal Reserve rate rise at about 15%, according to Bloomberg, so a surprise in earnings or energy could shift expectations.
Tesla and Meta results after the closing bell will test the mood in technology.
For now, the market’s message is mixed: earnings are strong enough to keep investors buying, but energy prices and bond yields remain the forces most likely to decide how long the rally lasts.
