The Nasdaq Composite closed at a record high on Tuesday, supported by gains in AI-related stocks, while oil prices and US Treasury yields eased as crude flows through the Middle East improved.
The Nasdaq rose 0.45%, while the S&P 500 was flat and the Dow Jones Industrial Average fell 0.36%.
Micron Technology and other AI-related stocks lifted the tech-heavy index as demand for artificial intelligence remained strong and corporate earnings stayed resilient.
“We maintain our constructive outlook on the AI trade, supported by rising adoption and monetization, as well as growing capital spending,” said Ulrike Hoffmann-Burchardi, chief investment officer Americas and global head of equities at UBS’ Chief Investment Office.
Oil prices declined as Saudi crude flows increased following the restart of the East-West pipeline, while shipping activity through the Strait of Hormuz also improved.
US crude fell 0.6% to US$94.59 a barrel, while Brent crude dropped 2.03% to US$98.30.
The lower oil prices also supported risk appetite after an Iranian official told Reuters that Tehran could reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade on Iranian ports.
Meanwhile, the US 10-year Treasury yield fell one basis point to 4.953%, although yields remained elevated as investors continued to price in further interest rate hikes from major central banks amid persistent inflation.
The Federal Reserve raised interest rates last week and indicated that its fight against inflation was not over, keeping the possibility of further tightening open.
Investors are also turning their attention to a meeting between US President Donald Trump and Chinese President Xi Jinping later this week, with markets watching for signs that the two countries can extend their trade truce and cooperate on artificial intelligence.
“For markets, the big question is what’s going to happen when the current one-year trade truce expires in November, and whilst the general tone remains positive, there still isn’t an agreement yet,” Deutsche Bank strategist Jim Reid said.
Reuters
