NEW YORK – U.S. stocks closed higher Tuesday as renewed buying in artificial intelligence-related technology companies and a series of stronger-than-expected corporate earnings reports offset growing concerns about rising oil prices and their potential impact on inflation.
The S&P 500 gained 0.9% to close at 7,509.20, while the Dow Jones Industrial Average rose 385.38 points, or 0.7%, to 52,224.64. The Nasdaq Composite, lifted by technology shares, climbed 1.3% to finish at 25,837.21.
Semiconductor companies once again led the market higher after suffering sharp declines in recent weeks. Investors returned to the sector despite lingering questions over whether heavy investment in artificial intelligence infrastructure will continue generating the profits and productivity gains markets have been expecting.
Micron Technology surged 12.2%, extending Monday’s rebound after posting a double-digit decline the previous week. Nvidia also advanced 2%, with the two companies providing the largest positive contribution to the S&P 500’s gains.
Oil Prices Renew Inflation Concerns
The rally came even as crude oil prices continued climbing amid ongoing tensions involving the United States and Iran.
Brent crude briefly approached $92 per barrel, its highest level in more than five weeks, before settling at $91.01, up about 2% on the day. Earlier this month, Brent had traded below $72 per barrel, roughly where prices stood before tensions involving Iran intensified.
Higher energy prices have renewed concerns that inflation could accelerate after showing signs of easing. Persistently elevated inflation could prompt the Federal Reserve and other major central banks to keep interest rates higher for longer—or raise them further—thereby increasing borrowing costs and weighing on economic growth and equity valuations.
Reflecting those concerns, the yield on the benchmark 10-year U.S. Treasury note rose to 4.63% from 4.60% a day earlier and has climbed steadily since the regional conflict intensified.
Corporate Earnings Provide Additional Support
Corporate earnings also helped sustain the market’s advance as several major U.S. companies exceeded Wall Street expectations.
Industrial manufacturer 3M gained 7.3% after reporting quarterly profit and revenue above analysts’ forecasts while raising its full-year 2026 profit outlook.
Hasbro climbed 8.8% after announcing that its Magic: The Gathering franchise generated more than $500 million in quarterly revenue for the first time. The toy maker also raised its full-year revenue forecast.
General Motors added 4.9% after posting stronger-than-expected quarterly profit and revenue. Chief Executive Officer Mary Barra said demand across North America remained strong.
Not every earnings report was welcomed by investors.
Danaher fell 11% despite beating analysts’ expectations for quarterly profit and revenue, as investors focused on weaker-than-anticipated underlying revenue growth expected during the summer period.
Homebuilder D.R. Horton slipped 0.9% after reporting quarterly results that exceeded expectations. Executive Chairman David Auld said affordability challenges and cautious consumer sentiment continued to weigh on homebuying activity.
Higher mortgage rates, driven by rising Treasury yields, could force the company to offer additional buyer incentives, potentially reducing profitability during the current quarter.
Global Markets Also Advance
European stock markets closed modestly higher, while Asian markets posted broader gains.
South Korea’s Kospi jumped 3.6%, supported by strong performances from Samsung Electronics and SK Hynix, both of which have benefited from growing demand for artificial intelligence technologies.
Japan’s Nikkei 225 gained 3.3% after markets reopened following a public holiday. Mainland China’s Shanghai Composite rose 1.8%, while Hong Kong’s Hang Seng Index finished little changed.
Despite recent volatility in technology shares, major U.S. stock indexes remain close to record highs, reflecting continued investor confidence even as higher oil prices, elevated bond yields and uncertainty surrounding AI investment present new risks for financial markets.
This report is based on reporting by The Associated Press.
Article Topics: Artificial Intelligence | Stock Market | Corporate Earnings | Semiconductor Industry | Oil Prices | Inflation | Federal Reserve
