Most U.S. stocks rise following strong profit reports from Equifax, Hasbro and other big companies

On Tuesday, the majority of U.S. stocks experienced gains following positive earnings reports from major companies such as Equifax and Hasbro, while oil prices retreated after reaching near highs not seen since the onset of the Iran conflict.

The S&P 500 index increased by 0.3 percent, and the Dow Jones Industrial Average surged by 529 points, or one percent. In contrast, the Nasdaq composite faced a slight decline of less than 0.1 percent, influenced by continued volatility in the artificial intelligence sector.

Stock values generally align with corporate profitability over time, and many companies reported quarterly results that surpassed analysts’ expectations. This optimistic outlook on growth has enabled the U.S. stock market to achieve record highs recently, despite ongoing concerns about elevated inflation, rising interest rates, and other challenges impacting Wall Street.

Equifax saw a significant increase of 11.3 percent in its stock price after announcing a larger-than-anticipated profit for the summer, even as high mortgage rates affected some areas of its business. Similarly, Hasbro's shares rose by 11.2 percent after the toy manufacturer revealed that its “Magic: The Gathering” game generated over $600 million in revenue during a quarter for the first time. 3M also reported a stronger-than-expected profit, leading to a 5.8 percent rise in its stock, despite consumers feeling the pinch from high inflation.

The stock market received a boost as Brent crude oil prices fell by 0.7 percent to $108.79 per barrel, reversing an earlier gain. Earlier in the day, oil prices had approached $112, nearing their highest levels since the conflict with Iran began in late February. If this decline in oil prices continues, it may alleviate some inflationary pressures. Throughout the month, Brent prices have fluctuated between $97 and $112 per barrel amid uncertainty regarding the energy sector's return to stability.

Airlines and other fuel-dependent companies benefited from Tuesday's dip in oil prices. American Airlines shares rose by 3.7 percent, while United Airlines gained 2.3 percent. Another notable performer was Braze, a customer engagement platform, whose stock surged by 51.7 percent to $45.57 after Salesforce announced its intention to acquire the company for $47.50 in cash per share.

However, General Motors faced challenges, with its stock dropping 6.8 percent despite reporting a profit that exceeded analysts' forecasts. The company also unveiled a plan to return up to $20 billion to shareholders through stock buybacks. Yet, pressure remains on companies to not only deliver robust profits currently but also sustain performance in the future. GM's profit forecast for 2026 fell short of expectations, further contributing to investor concerns.

The artificial intelligence sector continued to experience turbulence. Recent enthusiasm surrounding AI technology has been tempered by fears that rising interest rates in the bond market could hinder the borrowing necessary for companies to purchase AI chips. Last week marked the worst performance for the U.S. stock market since June, largely due to declines in AI-related stocks.

CoreWeave, a company involved in AI chip rentals, displayed notable volatility. Its stock initially dropped over 6 percent at the start of Tuesday's trading before rebounding to a 5 percent gain, only to settle at a 1.7 percent increase later. This pattern of sharp fluctuations is not new for CoreWeave, which has borrowed funds to acquire AI chips for cloud-based rental services. The previous day, its stock swung between a 7 percent gain and a 3.5 percent loss following a significant decline of about 25 percent the prior week.

Overall, the S&P 500 rose by 21.84 points to reach 7,712.57. The Dow Jones Industrial Average increased by 529.85 points to 52,495.88, while the Nasdaq composite fell by 6.07 points to 26,424.82.

The troubles faced by AI stocks began in Asia, where South Korean AI firm Elice had a challenging debut on the stock market, witnessing a 32 percent drop on its first day of trading in Seoul. Consequently, South Korea’s Kospi index fell by 3.7 percent.

In European markets, indexes saw slight declines after recovering from larger losses earlier in the day. The CAC 40 index in Paris decreased by 0.4 percent, while London’s FTSE 100 fell by 0.3 percent. The previous day, European markets experienced sharp declines amid violent protests that may compel governments to increase spending to address voter discontent, potentially adding strain to their already burdened bond markets.

Contributors to this report include Yuri Kageyama and Michelle Chapman of the Associated Press.