The S&P 500 index rose by about 0.5% to 0.7%, reaching above 7,830 points at one point during the session. Following a record high on Monday, the Nasdaq Composite Index rose another approximately 0.6% on Tuesday; the Dow Jones Industrial Average increased by about 0.4%, but remained below its historical high set in August.

These increases continued the rebound in tech stocks from Monday. At that time, NVIDIA, Microsoft, and other large heavyweight stocks drove the Nasdaq to new highs, despite abnormally high bond yields.

Oil prices falling below $100 add further momentum to the stock market

One of the biggest changes on Tuesday came from the commodities market.

Brent crude oil fell by more than 2% to around $98 per barrel, alleviating concerns in the market that high energy prices could keep U.S. inflation at high levels for a longer period. The decline in oil prices also reduced some pressure on the U.S. Treasury market; earlier this week, yields soared to multi-decade highs.

The yield on 10-year U.S. Treasury bonds rose to around 5.31% on Monday before falling back. This level once created an unfavorable environment for high-valued growth stocks.

Normally, higher yields mean that future corporate profits, when discounted to today's value, will be less valuable, especially for tech stocks. However, the Nasdaq continues to set new records because the profit growth of companies related to artificial intelligence has so far offset this valuation pressure.

AI Profits are still driving this round of gains

Investors are also preparing for another strong earnings season.

This expectation further strengthens the AI market trend, although the range of market leaders remains relatively concentrated.