The S&P 500 rose 0.58% to top 7,800 for the first time, while the tech-heavy Nasdaq gained 0.45% and the Dow climbed 0.49%, though it remains slightly below its August record. The rally was fueled by positive developments at AI chipmakers Marvell Technology, Advanced Micro Devices and Broadcom, which have shown continued growth in the chips used to power artificial intelligence.
Wall Street grew more optimistic that the Federal Reserve will leave interest rates unchanged at its October meeting after September job figures showed underwhelming growth. Multiple Fed officials have indicated the next rate increase can wait.
The optimism in equities contrasted with turmoil in the US bond market. The 10-year Treasury yield reached 5.349% on Monday, the highest since April 2022, before dipping back down Tuesday. High inflation and interest rate concerns have rattled bonds, typically seen as a safe investment.
For American consumers, energy prices remain a major pain point. While gas prices have dipped recently, they are still about $1.20 per gallon higher than a year ago. Diesel, used for trucks and public transport, is over 40% higher than last year despite a drop from recent highs.
The economy is expected to be a top issue in the upcoming midterm elections. At a rally in Nebraska, Donald Trump said "our nation is doing better now than it's ever done" and predicted gas prices would fall below $1.85 per gallon "in no time". The disconnect between stock market records and everyday costs is shaping up as a key political battleground.