US stocks rise as strong earnings and lower oil prices lift sentiment

US stock markets experienced a positive shift on Tuesday, driven by robust earnings reports from several companies, including Equifax and Hasbro. Concurrently, a decline in oil prices contributed to the overall optimistic sentiment among investors. The S&P 500 index increased by 0.3%, while the Dow Jones Industrial Average surged by 529 points, or 1%. Conversely, the Nasdaq composite faced a slight decrease of less than 0.1%, impacted by fluctuations in stocks related to artificial intelligence.

Investors often look to corporate earnings as indicators of market performance, and many companies reported quarterly results that surpassed analysts' expectations. This trend of strong growth projections has underpinned the recent record highs in the US stock market, despite ongoing concerns about elevated inflation and rising interest rates.

Equifax saw a notable increase of 11.3% in its stock value after announcing a profit for the summer that exceeded forecasts, even amidst challenges posed by high mortgage rates affecting certain segments of its operations.

The decline in oil prices also played a crucial role in boosting market sentiment. The price for a barrel of Brent crude fell by 0.7% to $108.79 after reaching nearly $112 earlier in the day, nearing its highest level since the onset of the conflict with Iran in late February. If this downward trend in oil prices continues, it could alleviate some inflationary pressure. This month, Brent crude has fluctuated between $97 and $112 per barrel due to uncertainty regarding the stabilization of the energy sector.

Airlines and other fuel-intensive industries benefited from the drop in oil prices on Tuesday. American Airlines' stock rose by 3.7%, and United Airlines saw an increase of 2.3%.

In a significant development, Braze, a customer engagement platform, experienced a dramatic surge of 51.7%, reaching $45.57 per share, following Salesforce's announcement of its intention to acquire the company for $47.50 per share in cash.

On the other hand, General Motors faced challenges in the market, with its stock plummeting by 6.8% despite reporting a profit that surpassed analyst expectations. The automaker also revealed a plan to return up to $20 billion to shareholders through stock buybacks. However, GM's forecast for profits over the full year of 2026 included a midpoint that did not meet analysts' projections, adding to investor concerns.

The volatility surrounding artificial intelligence stocks persisted as well. These stocks have been at the forefront of market fluctuations, with initial excitement about the technology giving way to apprehensions regarding how high interest rates might hinder borrowing, which many companies rely on to finance AI chip acquisitions. Last week marked the worst week for the US stock market since June, largely due to weaknesses in AI-related stocks.

CoreWeave, a company that has been particularly volatile, witnessed its stock drop over 6% at the beginning of Tuesday's trading but managed to recover to a 5% gain before settling at a 1.7% increase. This stock has a history of drastic swings, as the company finances AI chip purchases through borrowing, which it then rents out to customers via cloud services. Just a day prior, CoreWeave had experienced a similar pattern, fluctuating between a 7% gain in the morning and a 3.5% loss in the afternoon after a significant decline of around 25% the previous week.

Overall, the S&P 500 climbed by 21.84 points to close at 7,712.57. The Dow Jones Industrial Average rose by 529.85 points, finishing at 52,495.88, while the Nasdaq composite dipped by 6.07 points to end at 26,424.82.