Key insights
- Wall Street opened higher, with the Nasdaq Composite reaching a new intraday record, driven by optimism surrounding AI advancements, particularly from Meta Platforms. Shares of Meta, AMD, and Intel saw significant gains. Concurrently, falling oil prices, influenced by diplomatic efforts in the Middle East, contributed to the broader market rally. Investors remain cautious about potential oil supply disruptions and their impact on inflation and central bank policy.
Investing.com -- Wall Street opened higher on Tuesday, extending gains a day after notching its best performance since August on the back of a rally in the artificial intelligence trade.
At 09:34 ET (13:34 GMT), the benchmark S&P 500 added 0.2% to 7,778.31 points, while the tech-heavy NASDAQ Composite climbed 0.4% to 27,215.83 points, taking out a new all-time intraday high. The blue-chip Dow Jones Industrial Average rose 0.3% to 52,184.96 points.
The main averages on Wall Street rallied in the prior session, fueled in large part by optimism around a new AI model from Facebook-owner Meta Platforms which has sparked expectations that agentic AI may be coming to mainstream consumers.
Shares of Meta spiked, as well as those of firms like AMD and Intel, which make the central processing units crucial for AI agents. The Philadelphia Semiconductor Index, a tracker of the chipmaking industry, surged 4.3%. Meanwhile, the tech-heavy NASDAQ Composite notched its first record close since the beginning of June.
Beyond tech, investors have also been keeping tabs on a sustained drop in oil prices. Brent crude futures, the global oil benchmark, have fallen below $100 a barrel, reflecting optimism around diplomatic efforts to resolve the war in the Middle East and restart constrained regional oil flows.
Iran has offered to reopen the critical Strait of Hormuz within seven days in exchange for a U.S. military de-escalation, Kyodo News reported.
U.S. President Donald Trump has also said he is open to meeting Iranian President Masoud Pezeshkian on the sidelines of a United Nations meeting in New York this week, although news reports suggested the talks are unlikely to take place. Trump is slated to speak at the UN General Assembly gathering on Tuesday morning.
Still, traders are wary of ongoing oil supply disruptions, which could maintain upward pressure on energy prices and exacerbate worries over stubbornly elevated inflation that ignites a central bank policy tightening cycle.
Trump has also continued to threaten Iran and demand the country accept a U.S. deal. Tehran has responded by warning that it would use “new weapons” to retaliate against any further U.S. aggression.
Meanwhile, Iran-backed Houthi militants and Saudi-aligned forces in Yemen have battled for territory dominating the Bab el-Mandeb Strait, a key waterway linking the Red Sea with the Gulf of Aden. Saudi Arabia has relied on the conduit to connect oil exports to global markets since the effective closure of the Strait of Hormuz earlier this year.
Despite continued aggression against Saudi Arabia, including attacks on locations within in the country that have disrupted a key east-west pipeline, recent reports have suggested that oil flows out of the kingdom have improved.
Elsewhere, markets are gearing up for Chinese President Xi Jinping’s closely watched trip to Washington on Thursday, marking his first state visit to the U.S. during President Donald Trump’s second term.
The two leaders are expected to cover a range of topics, including recent concerns around AI safety, as well as a possible extension to a temporary trade truce due to expire in November.
"For markets, the big question is what’s going to happen when the current one-year trade truce expires in November, and whilst the general tone remains positive, there still isn’t an agreement yet," analysts at Deutsche Bank said in a note.
Ambar Warrick and Scott Kanowsky contributed to this article
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