Wall Street closed mostly higher on Tuesday as a batch of strong third-quarter earnings reports gave investors reason for optimism, even as a rise in bond yields kept pressure on some of the market's most richly valued technology stocks.
The Dow Jones Industrial Average advanced 1 percent to close at 52,494.88, with 22 of its 30 components ending the day higher. The S&P 500 gained roughly 0.3 percent to finish at 7,712.57. The Nasdaq Composite, weighed down by weaker performance among some of the biggest technology names, slipped about 0.02 percent to 26,424.82. The CBOE Volatility Index, Wall Street's main gauge of fear, fell more than 6 percent to 17.31, suggesting traders see less near-term turbulence ahead despite the many moving pieces in global markets this week. Advancing stocks outnumbered decliners by roughly two to one on both the New York Stock Exchange and the Nasdaq.
Two notable earnings reports landed after Tuesday's closing bell: SpaceX and Super Micro Computer both beat Wall Street's expectations, according to market trackers, continuing a quarter in which many companies have topped estimates. Oil prices, which had spiked earlier in the week on headlines tied to the ongoing conflict involving the United States, Israel and Iran, eased somewhat on Tuesday, which also helped support investor sentiment. The benchmark 10-year U.S. Treasury yield, meanwhile, was holding near 5.1 percent, a level that continues to make some investors nervous about the valuations assigned to artificial-intelligence-related stocks. A weaker-than-expected reading on U.S. housing starts, down 5.2 percent from the prior month, pulled both the dollar and yields lower at the margin.
In Asia on Wednesday, Japan's Nikkei 225 rose more than 1 percent, led by semiconductor stocks, even though Japan's September trade deficit came in far larger than economists had forecast. South Korea's Kospi jumped nearly 3 percent, rebounding from a sharp decline the day before, while Hong Kong's Hang Seng and mainland China's Shanghai Composite both slipped modestly and Australia's ASX 200 was roughly flat.
Investors are watching the 10-year Treasury yield closely for signs of further pressure on technology and AI-related shares, along with the earnings calendar, which includes reports from AT&T and Tesla due Wednesday.
Why did the Nasdaq lag the Dow and S&P 500?
Weaker performance among some of the largest technology companies, amid continued pressure from higher bond yields, kept the tech-heavy Nasdaq roughly flat even as the broader market rose.
What's pressuring AI stock valuations right now?
The 10-year Treasury yield near 5.1% is making some investors more cautious about paying high prices for future earnings growth, which weighs especially on fast-growing AI-related names.