The S&P 500 index reached a new intraday historical high on Tuesday, driven by gains in key tech stocks and a decline in U.S. Treasury yields.
The broad market index rose by 0.58%, closing at a record high of 7,818.93 points; the Dow Jones Industrial Average increased by 253.38 points, or 0.49%, closing at 51,521.28 points. The Nasdaq Composite Index also reached a record high of 27,599.79 points, with technology stocks playing a major role in this increase.
The rise in chip manufacturers has fueled this round of gains. Marvell Technology rose by 5.8%, and Advanced Micro Devices rose by nearly 3%, with investors becoming increasingly optimistic about the prospects of these two companies. Other companies such as Broadcom also saw a rise of 3.7%.
"Everyone thinks the market is rising. AI is the place to be," said Integrated Financial Partners's Chief Investment Officer, Stephen Kolano. Investors "are currently ignoring inflation concerns, especially those related to oil, diesel, etc. It's as if to say, 'Well, this is a problem that might be solved in the future.'"
Oil prices closed essentially flat on the day. Brent crude oil rose by 0.26% to close at $100.58 per barrel. West Texas Intermediate (WTI) crude oil futures only increased by 0.01% to $89.44 per barrel.
Kolano also indicates that interest rates are 'fundamentally at the levels they need to be.' The yield on the benchmark 10-year U.S. Treasury note fell by more than 4 basis points to 5.262%, and the yield on the 30-year Treasury note fell by more than 3 basis points to 5.631%. Both hit levels not seen since 2002 on Monday.
U.S. Treasury Secretary Scott Bennett insists that the government's debt burden can be controlled. Bennett attempts to reassure investors, stating that a combination of economic growth and spending restrictions will "soon" begin to change the U.S. government's borrowing path. On Monday evening, during a fireside chat in Pennsylvania, he said that the government will start to "reverse this trend."
Lisa Schalate, Chief Investment Officer of Morgan Stanley Wealth Management, stated in a client report that the bond market has been experiencing significant volatility over the past six weeks. She attributed the volatility to several factors: the Federal Reserve may introduce a new policy framework, the economic growth situation, high oil prices, and the ongoing Middle East conflict.
Shallette wrote, "Although there is an implied increase in volatility during the session, the level of volatility over these six weeks has not yet reached the extreme levels seen during the bear market outbreak in U.S. stocks in 2022."
Traders are eagerly awaiting the minutes of the Federal Reserve's September interest rate meeting to be released on Wednesday, which may reveal the considerations behind policymakers' decisions to raise interest rates.
In addition to the decline in U.S. Treasury yields, the drop in oil prices on Tuesday also provided support for the stock market. Brent crude oil futures fell by 2%, to around $98 per barrel; WTI crude oil futures tumbled by 2%, to around $87 per barrel.
U.S. stocks closed higher on the previous trading day, and the Nasdaq Composite Index hit a record high. This index, which has a high weight of technology stocks, is expected to continue its upward trend and reach new highs.
In the Asian market: The Nikkei 225 index rose by 0.29% on Tuesday; the South Korean Composite Index fell by 0.23%; the Australian S&P/ASX 200 index rose by 0.53%; the Hong Kong Hang Seng Index rose by 0.95%; the Chinese mainland market was closed due to the Golden Week holiday.
The U.S. trade deficit has expanded to the level before Trump introduced reciprocal tariff policies at the beginning of last year.
The U.S. Department of Commerce announced on Tuesday that the trade deficit in August reached $105.6 billion, the highest since March 2025; the trade deficit in March 2025 was $132.98 billion. This figure also exceeded the forecast of $102 billion given by economists surveyed by Dow Jones.
The US Dollar Index also touched a low of 101.754 during this trading session, marking its lowest level since October 2nd; on October 2nd, the index had fallen to 101.668.
Investors are starting to say "no" to the high valuation of AI, and Wall Street IPO activities have plummeted.
Wall Street IPO activities have slowed down to a mere trickle, with investors showing little interest in new share offerings. Coupled with market concerns about overly high valuations, this quarter, which was originally expected to see a boom in listings, is now under pressure.
The delays in the listing of Anthropic and OpenAI have also dampened sentiment in the U.S. equity capital market. A person in charge of the equity capital market at a large U.S. asset management company said, "No one is interested in any companies other than Anthropic right now."
Investment bankers have seen a booming business this year, largely thanks to SpaceX's IPO in June. However, with growing concerns about the downturn in the AI industry and public opposition to data centers, the IPO market has been drying up in recent weeks.
The aforementioned banker added that investors are increasingly questioning the "unrealistic" valuations obtained by companies related to the AI investment boom.
BCA Research data shows that since the first trading day this year, the stock prices of technology companies listed on the market have fallen by an average of about 23%, further exacerbating market concerns that banks are setting excessively high transaction prices in order to secure underwriting business.
