Oil prices declined again on Tuesday, easing pressure in the bond market and helping support gains across major U.S. stock indexes.
The S&P 500 rose 0.3%, moving closer to its record high reached earlier this month. The Dow Jones Industrial Average gained 160 points, or 0.3%, while the Nasdaq Composite advanced 0.7%.
Lower Oil Prices Ease Inflation Concerns
Energy markets saw some of the biggest moves during the session, with Brent crude falling 3.6% to $87.27 per barrel. The decline marked a second consecutive drop after oil prices had gained in 13 of the previous 14 sessions.
The drop came despite rising tensions between the United States and Iran after the Trump administration announced additional sanctions aimed at increasing economic pressure on Tehran.
Brent crude prices have fluctuated between $72 and $102 per barrel over the past month as markets reacted to changing expectations around whether the United States and Iran could reach an agreement that would allow oil tankers to move freely through the Persian Gulf again.
A Pakistani delegation left Iran on Tuesday after discussions with Iranian officials focused on reopening the Strait of Hormuz and restarting negotiations to resolve tensions between the two countries. Pakistani officials described the meeting as positive and productive.
Bond Yields Decline After Recent Pressure
The decline in oil prices reduced concerns about inflation, which had contributed to rising Treasury yields throughout the summer. Elevated yields had pushed the U.S. Treasury Department to announce increased purchases of longer-term Treasury securities last week.
Lower bond yields can support economic activity by reducing borrowing costs and easing pressure on stock valuations.
The 10-year Treasury yield declined to 4.63% from 4.70% on Monday and 4.74% at the end of the previous week. Despite the move lower, yields remain well above the 3.97% level seen before the conflict with Iran increased concerns about oil prices and inflation.
Nvidia Leads Technology Stocks Higher
Shares of Nvidia and other artificial intelligence-related companies helped drive market gains. Nvidia increased 2.2% after falling 2.9% in the previous session, when it was the largest drag on the S&P 500.
AI-related stocks have experienced increased volatility as investors debate whether valuations have risen too quickly and whether the industry’s growth will generate enough profits to justify current prices.
Nvidia’s upcoming quarterly earnings report on Wednesday is expected to provide important signals about demand for artificial intelligence technology and the future direction of semiconductor stocks.
Retail Sector Faces Pressure After Dick’s Results
While technology stocks gained, consumer companies faced challenges. Dick’s Sporting Goods shares dropped 30.7%, marking the company’s worst trading day on record after weaker-than-expected quarterly results.
The retailer said it reduced prices on some footwear and apparel products to remain competitive, while certain product launches underperformed expectations.
Dick’s also lowered its forecast for an underlying profit measure in 2026 for both its Dick’s and Foot Locker businesses. The company acquired Foot Locker last year in a $2.4 billion deal.
Consumer Confidence Weakens
The S&P 500 gained 24.42 points to close at 7,677.28. The Dow Jones Industrial Average increased 160.24 points to 53,577.40, while the Nasdaq Composite climbed 171.11 points to 26,151.30.
However, concerns remain about the strength of U.S. consumer spending, which represents a major driver of economic growth. Households continue to face higher prices for everyday goods and a weaker labor market outlook following recent job cuts.
The Conference Board reported that consumer confidence declined in August by more than economists expected, reflecting growing concerns about future economic conditions.
Global Markets Mostly Move Higher
Stock markets around the world generally posted modest gains. South Korea’s Kospi, supported by major artificial intelligence companies, increased 0.7% and continued stabilizing after a sharp decline earlier in the summer.
