WASHINGTON (dpa-AFX) - After showing a notable move the upside early in the session, stocks gave back some ground over the course of the trading day on Tuesday but continued to turn in a strong performance. The major averages extended a recent upward trend, with the Nasdaq and S&P 500 reaching new record closing highs.
The major averages ended the day firmly in positive territory but well off their highs of the session. The S&P 500 climbed 44.98 points or 0.6 percent to 7,818.93, the Nasdaq rose 122.48 points or 0.5 percent to 27,599.79 and the Dow increased 253.38 points or 0.5 percent to 51,521.28.
The early strength on Wall Street came amid an extended slump by the price of crude oil as well as a pullback by treasury yields.
While crude oil prices recovered over the course of the trading day, yields remained in the red after recently surging to multi-decade highs.
'The big bond market sell-off appeared to be yesterday's news on Tuesday as the S&P 500 hit fresh record levels, supported by buoyant AI stocks,' said AJ Bell head of markets Dan Coatsworth.
'Expectation is already building ahead of the U.S. third-quarter earnings season, with numbers starting to filter their way into the market in the coming weeks,' he added. 'Perceived AI winners are likely to be under the spotlight, particularly given how dominant these companies now are in US indices.'
Traders were also looking ahead to the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday.
The minutes may shed additional light on Fed officials' thinking ahead of the central bank's next interest rate decision later this month.
CME Group's FedWatch Tool is currently indicating an 80.6 percent chance the Fed will leave rates unchanged and just a 19.4 percent chance of another quarter point rate hike.
In U.S. economic news, a report released by the Commerce Department showed the U.S. trade deficit widened by more than expected in the month of August.
The Commerce Department said the trade deficit increased to $105.6 billion in August from a revised $92.8 billion in July.
Economists had expected the trade deficit to grow to $99.0 billion from the $88.6 billion originally reported for the previous month.
Sector News
Networking stocks moved sharply higher over the course of the session, driving the NYSE Arca Networking Index up by 3.8 percent to its best closing level in almost two months.
Significant strength was also visible among airline stocks, as reflected by the 2.7 percent surge by the NYSE Arca Airline Index.
Interest rate-sensitive utilities stocks also turned in a strong performance amid the pullback by treasury yields, with the Dow Jones Utility Average jumping by 2.6 percent.
Housing, telecom and retail stocks also saw considerable strength on the day, while biotechnology stocks showed a significant move to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index shot up by 1.1 percent, while Hong Kong's Hang Seng Index jumped by 1 percent.
The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.4 percent.
In the bond market, treasuries have regained ground following a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has fallen 2.7 basis points to 5.284 percent.
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