The Dow Jones ended with gains of 250 points, while the S&P 500 closed above the mark of 7,800 for the first time. The Nasdaq Composite and Nasdaq 100, both of which hit records on Monday, extended their winning run, making new highs overnight as well. All three indices though, came off slightly from their respective session’s highs.
Gains were led by the AI-led theme. Marvell Technology shares gained after the company raised its full-year growth guidance at its investor day. AMD CEO Lisa Su said chip demand will remain very strong for the next few years, leading to the stock adding more to its 2026 rally, while Nvidia shares neared $6 trillion in market capitalisation, although that stock cooled from the day’s high.
A combination of stable oil prices, around $100 a barrel, and a small cool-off in bond yields, added to the bullish sentiment on the street.
Despite indices scaling new peaks, there are some concerns that remain for the US market:
First, analysts have highlighted that this rally has been narrower than the earlier ones. 34% of the S&P 500 market capitalization is made up of only the Magnificent Seven names, with the other 493 comprising of the remaining 66%.
Second, even though bond yields cooled overnight, they still remain at elevated levels and analysts said this was only a temporary blip in an otherwise weak bond market. BMO Capital warned of the 30-year yield hitting 6% this year itself, while BNP Paribas has warned that in case the US treasury suspends the 20-year bond, it could raise borrowing costs further. They advised shorting the 30-year note for targets of 5.8% on the yields front.
Third, Citigroup noted that while the Nasdaq 100 futures have seen the biggest weekly improvement in fresh risk-taking flows among major markets, investors continue to build fresh short positions on the smallcap-heavy Russell 2000 index. Non-dealers, which includes retail investors, hedge funds and others, have sold S&P 500 futures worth over $70 billion during the last six weeks, according to data from the CFTC, which is the biggest selling spree in at least 15 years, even though the index is at record high levels.All eyes today will be on the minutes of the last US Federal Reserve meeting which could provide more cues on how policymakers think on the road ahead for interest rates. Consumer credit data and quarterly results from Levi Strauss will also be reported today.