The Dow Jones Industrial Average rose 1.4% on Tuesday as upbeat earnings and a drop in oil prices overshadowed pressure on the artificial intelligence trade. CoreWeave credit spreads rose, and housing starts fell 5.2% in September.
The Dow Jones Industrial Average gained 714 points, or 1.4%, on Tuesday as upbeat earnings reports and a drop in oil prices overshadowed recent pressure on the artificial intelligence trade. The S&P 500 added 0.7%, while the Nasdaq Composite traded up 0.5%.
Earnings lift industrial and defense shares
Industrial and safety products producer 3M jumped more than 4% after better-than-expected earnings and a full-year guidance raise, giving the Dow a boost. Aerospace and defense companies Northrop Grumman and RTX also advanced 6% and 1%, respectively after earnings beats.
Not every report landed well. General Motors beat expectations and announced a $20 billion buyback, yet its stock was off roughly 7% in premarket trading.
Oil retreats while Middle East tension continues
Oil prices pulled back from earlier gains. U.S. West Texas Intermediate crude futures were down more than 1% at around $102 per barrel, and Brent crude futures fell more than 2% to roughly $106 a barrel. The moves added to declines in Treasury yields as traders continued to monitor developments in the Middle East.
Meanwhile, AI-related stocks staged a bit of a comeback as the session went on. Micron Technology, Intel and Sandisk all rose around 1%, and Advanced Micro Devices was up more than 1%. Jose Torres, senior economist at Interactive Brokers, wrote of "Wall Street breathing a sigh of relief" as participants drop hedges.
CoreWeave credit spreads rise as housing starts fall
However, investor concerns over CoreWeave's credit ticked higher. The spread on its five-year credit default swap was last above 1,121, up more than 17% over the past week, and spreads of 1,000 or greater are generally considered a sign of distress.
Privately owned housing starts totaled 1.22 million in September, down 5.2% from August and below the consensus for 1.3 million, as the Federal Reserve contemplates additional interest rate hikes.
Source: CNBC
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