Key facts
- The S&P 500 rose 1.5% and was 0.1% below its record high.
- The Dow Jones Industrial Average gained 1.3% to reach an all-time high.
- The Nasdaq composite increased by 2.1%.
- Brent crude oil prices dropped 4.7% to $83.77.
- The 10-year Treasury yield decreased to 4.68% from 4.75%.
The U.S. stock market rallied toward its all-time high as falling oil prices eased inflation concerns, boosting investor confidence. The S&P 500 gained 1.5%, and the Dow Jones Industrial Average reached a new record high, climbing 1.3%. The Nasdaq composite also saw a significant increase of 2.1%.
The decline in oil prices, with Brent crude sinking 4.7% to $83.77 per barrel, followed President Donald Trump's announcement of a decision to hold off on new strikes against Iran. This eased worries about global crude oil flows, which had previously driven up oil prices and Treasury yields.
The easing of oil prices also benefited companies with substantial fuel costs, such as airlines. United Airlines and American Airlines saw significant gains, as did Norwegian Cruise Line Holdings. Boeing shares jumped 8% after receiving certification for its 737 MAX-7 planes from U.S. regulators.
Corporate earnings also provided a lift, with Tyson Foods reporting a stronger-than-expected profit for the spring quarter. The company cited strength in its chicken and prepared foods businesses. Overall, companies in the S&P 500 are on track to deliver earnings per share growth of 47% year-over-year for the spring quarter, the strongest growth since early 2021.
Manufacturing data also offered encouragement, showing an acceleration in U.S. manufacturing growth to its strongest level since 2022. However, the market remained unsettled by volatility in chip stocks, which have experienced significant swings due to concerns about the sustainability of revenues driven by the artificial intelligence boom. If AI proves less profitable than anticipated, Big Tech companies might reduce their spending on data centers, impacting chip stocks.