NEW YORK (AP) — The U.S. stock market is nearing an all-time high Tuesday.
The S&P 500 climbed 0.6% and is on track to end the day higher its record closing level established in August. Even with concerns about warhigh inflation and ramped up bond market pressure continuing to weigh on it, the backbone of many 401(k) accounts has climbed 23% since hit rock bottom end of March.
The Dow Jones Industrial Average was up 201 points, or 0.4%, as of 1:23 p.m. Eastern Time, while the Nasdaq composite added 0.5% to his own absolute record set the day before. Record high stock prices help investors feel better about their financial situation, or at least feel less bad, while Americans are generally feel more discouraged to cope with the rapid increase in the cost of living.
AP AUDIO: Wall Street rebounds to an all-time high
US stocks are flirting with records.
Many of the fears that pushed the U.S. stock market to record lows in March, triggered by the war with Iranactually came true. Oil prices surged, worsening inflation. That in turn has helped drive up yields in bond markets around the world, which threatens to slow the economy by making it more expensive for everyone to borrow money and making investors less willing to pay high prices for stocks.
But despite all these challenges, one vital source of support has remained resolute for the U.S. stock market: the relentless ability of American companies to achieve greater profits.
Lamb Weston, which sells frozen fries and other potato products, for example, said Tuesday that its profits and revenue in its most recent quarter exceeded its forecasts. The results also beat analysts’ expectations and the stock rose 11.1%.
CEO Mike Smith said the company continues to face unexpected increases in freight and other expenses while inflation remains high. But the company nevertheless raised its underlying profit forecast for its full financial year.
It’s not just potato products that are proving more profitable. All kinds of companies are lining up to soon release their July-September profits, and expectations are high.
Analysts expect S&P 500 companies to report nearly 30% overall growth in earnings per share from a year earlier, according to FactSet. If they are correct, this would be the third consecutive quarter of growth above 25%.
And along with interest rates, profits made by companies are the main levers that help set stock prices.
Delta Air Lines will report its third-quarter results on Friday, with several of the nation’s largest banks headlining the following week.
Stocks also came under less pressure on Tuesday as the price of Brent crude oil, the international standard, stabilized. It fell 0.1% to 100.21 a barrel. That’s down from nearly $110 a few weeks ago, and the easing removes some of the inflationary pressure.
That also helped push the yield on the 10-year Treasury note down to 5.28%, from 5.31% late Monday. Global yields have recently reached their highest levels in years, if not decades.
On Wall Street, stocks involved in the artificial intelligence frenzy have been responsible for much of the market’s record advance, and Constellation Energy jumped 15% Tuesday amid the tidal wave.
He announced a long-term deal to provide Google with as much electricity as would be produced by a new nuclear reactor. The rise of AI data centers has not only increased demand for electricity, but also for construction crews and materials throughout the economy.
Elsewhere on Wall Street, Option Care Health soared 33.1% after CD&R and McKesson announced the purchase of the infusion services provider. The two pay $32.05 for each Option Care Health share, valuing it at about $5.8 billion.
CDR is a private investment company. Shares of McKesson, the health services company, added 0.3%.
In foreign stock markets, indexes rose in Europe as yields continue to fluctuate in their bond markets amid concerns about high government debts and tight budgets.
In France, tens of thousands of demonstrators marched in support of student protests demanding more funding for schools.
In Asia, Japan’s Nikkei 225 jumped 1.1% and Hong Kong’s Hang Seng 1%, but South Korea’s Kospi fell 0.9%.
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AP Business writers Chan Ho-him and Matt Ott contributed to this report.
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An earlier version of this story incorrectly identified Constellation Energy.
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