The U.S. stock market advanced Tuesday, buoyed by a rebound in artificial intelligence-related shares that had faced a steep correction last week. The S&P 500 climbed modestly, closing within striking distance of its recent all-time high.
The Dow Jones Industrial Average increased by several hundred points, while the Nasdaq composite, with a heavy weighting in tech stocks, rose slightly more. Chipmakers and memory manufacturers regained momentum, with some recovering double-digit declines from earlier in the week. One notable example, Micron Technology, surged again after a sharp drop, reflecting ongoing volatility amid optimism about AI-driven growth.
Meanwhile, oil prices softened after reaching a recent peak, easing pressure on markets. The price of Brent crude retreated from just under $100 per barrel to around the low $90s. This decrease reduced input costs for businesses particularly vulnerable to rising energy expenses, such as airlines. United Airlines and Delta Air Lines saw their shares climb by healthy margins as fuel costs moderated, ending a series of increases that forced fare hikes nationwide.
The volatility in oil prices has largely been shaped by geopolitical developments, including tentative hopes for a resolution allowing oil shipments through the Strait of Hormuz. The resumption of these shipments would stabilize global energy supply, potentially curbing inflationary pressures.
Bond markets mirrored the shifts seen in energy prices, with Treasury yields retreating slightly but remaining elevated compared to pre-conflict levels. The yield on the 10-year Treasury note edged down but stayed significantly above the rates before recent tensions heightened inflation concerns.
Investors remain cautiously focused on upcoming inflation data releases scheduled later this week. Strong inflation readings combined with a resilient labor market feed speculation that the Federal Reserve could continue raising interest rates to tame price pressures. Higher rates could dampen economic growth and weigh on equity valuations in the months ahead.
Across international markets, equities showed tentative gains following previous sharp declines driven by similar global concerns. South Korea’s Kospi index notably rebounded, recovering much of its recent losses, while European stocks edged higher, reflecting cautious optimism as the broader economic outlook remains uncertain.