U.S. stocks climbed on Tuesday (October 6), with the S&P 500 rising 0.58% to close at 7,819 points — its first record close since mid-August and the first time the benchmark has ever finished above 7,800. The tech-heavy Nasdaq Composite set a closing record for the second straight session.
The Dow Jones Industrial Average gained 253 points, or 0.49%. But the blue-chip index is lagging the rally badly: it remains about 5% below the record it set in early August. The immediate tailwind on Tuesday was a calmer bond market — the 10-year Treasury yield pulled back from a 24-year high, taking pressure off equity valuations.
The 10-year yield fell to about 5.28% in late-afternoon trading, after touching above 5.35% the day before — its highest level since April 2002. Lower yields are generally supportive for stocks, especially growth-oriented tech names. Global bond markets steadied too: heavily sold French debt bounced after far-right presidential candidate Marine Le Pen pledged spending cuts and a smaller budget deficit, with the spread between French and German bonds narrowing from almost 160 basis points to 132.
The rally is increasingly running on a single engine: artificial intelligence. Nvidia notched its third straight intraday record on Tuesday and closed up 0.1%, closing in on a $6 trillion market capitalization — which would make it the first company in history to reach that mark. The Roundhill Magnificent Seven ETF, tracking the mega-cap tech cohort, rose 0.5%.
The macro backdrop is cooperating. September jobs data released Friday came in weaker than expected, and traders now see just a 24% chance of a Federal Reserve rate hike at its October meeting, down from 70% a week ago, according to CME's FedWatch tool. Investors are also looking ahead to third-quarter earnings season: analysts expect S&P 500 profits to jump more than 30% year over year, driven largely by AI-related stocks, according to LSEG data.
The records mask a narrow market. Gains are concentrated in tech giants while healthcare, banks and consumer staples are declining, along with small caps and blue chips like the Dow industrials. Fewer than half of S&P 500 stocks closed above their 200-day moving average on Tuesday, a share that has been steadily declining since August, according to Dow Jones Market Data. "Tech is almost seen as defensive in some ways," said Keith Lerner, chief investment adviser at Truist Advisory Services, summing up the mood.
On Wednesday, the Federal Reserve releases the minutes of its September meeting, which could offer fresh clues on the rate outlook. Next week, large U.S. banks kick off third-quarter results, formally opening earnings season. Oil and the Middle East remain wild cards: crude ticked higher Tuesday as traders watched Houthi attacks on Saudi targets, with Brent futures pushing above $101 a barrel. How far this record run goes depends on whether AI companies can deliver the eye-watering earnings forecasts analysts have penciled in.
(Compiled from reporting by CNN, Reuters, Investopedia, The Wall Street Journal, DevDiscourse and Minichart)