U.S. stocks finished higher on Tuesday, with the S&P 500 and Nasdaq Composite reaching record highs during the session as investors piled back into artificial intelligence names. A pullback in Treasury yields from Monday’s multi-decade highs gave stocks extra room to run, since lower yields make borrowing cheaper and make stocks look more attractive compared with bonds. Small companies lagged, though, with the Russell 2000 slipping 0.59%.
What Moved Markets
The Dow Jones Industrial Average gained 260.47 points, or 0.51%, to close at 51,528.37. The S&P 500 rose 44.98 points, or 0.58%, to finish at 7,818.93, extending its climb above the 7,800 level it first closed over on Monday. The Nasdaq Composite added 122.48 points, or 0.45%, to end at 27,599.79.
Chipmakers and other AI-linked companies did much of the heavy lifting. Nvidia edged higher as its market value neared the $6 trillion mark, and AMD’s CEO said demand for computing power continues to outrun supply, reinforcing the view that spending on AI infrastructure is not slowing down. The 10-year Treasury yield eased to roughly 5.29% after touching a 24-year high on Monday, which also helped sentiment.
One note of caution: market leadership is very narrow. Nvidia, Apple and Microsoft together now make up more than 21% of the S&P 500, so the index can be heavily swayed by just a few companies. Tuesday’s weakness in small caps is another sign that the rally was not evenly spread.
Notable Movers
Constellation Energy (CEG) was the standout, jumping by double digits after announcing a 20-year, roughly $4.3 billion agreement to supply nuclear power to Google. The 890-megawatt deal is meant to feed the tech giant’s growing data center needs, and it lifted other power producers too.
Vistra (VST) rose about 8% and Talen Energy (TLN) gained about 7% in sympathy, according to market reports.
Nvidia (NVDA) gained roughly 1% and AMD (AMD) also traded higher, helped by the CEO’s comments on demand. In deal news, the merger of Paramount Skydance and Warner Bros. Discovery officially closed after nearly a year of regulatory review, creating a combined entertainment company.
Constellation Brands (STZ), the beer and wine maker, is also scheduled to report earnings, so watch for its results and guidance.
Looking Ahead
Investors will be watching whether bond yields keep easing, since a renewed jump in yields has been a recurring source of pressure on stocks in recent weeks. Reaction to Constellation Brands’ earnings and upcoming economic data on trade and employment will also help set the tone for the next session, as the third-quarter earnings season approaches. With indexes at or near records and gains concentrated in a handful of giant tech stocks, a broader rally would be a healthier sign. This post is for informational purposes only and is not investment advice.