US stocks traded mixed on Tuesday as the Dow hit a fresh all-time high while the Nasdaq 100 slipped. The broader tape was supported by a sharp drop in crude oil, which eased inflation expectations and helped keep bond yields lower, but gains were limited by weakness in energy-related shares and softer US housing data. Traders also looked ahead to a two-day Federal Reserve meeting beginning Tuesday.
The S&P 500 rose 0.11%, the Dow Jones Industrial Average climbed 0.57% to a record level, and the Nasdaq 100 fell 0.18%. In futures markets, June S&P 500 E-minis were up 0.09% while June Nasdaq E-minis were down 0.14%.
Key takeaways
- Index moves: The Dow reached a new all-time high (+0.57%), while the S&P 500 edged higher (+0.11%) and the Nasdaq 100 declined (-0.18%).
- Catalyst: Oil prices fell more than 3% to a 3.25-month low after developments tied to the US-Iran agreement to reopen the Strait of Hormuz.
- Macro inputs: US housing starts and building permits came in weaker than expected, while import prices excluding petroleum rose more than forecast.
- Rates focus: The 10-year Treasury yield fell about 2 basis points to roughly 4.45% ahead of the Fed meeting and the post-meeting press conference under new Fed Chair Kevin Warsh.
- Sector implications: Airlines, cruise operators, and parts of the technology supply chain moved higher, while energy stocks dragged on the market.
What drove the move
Energy was the clearest drag on equities. WTI crude oil fell more than 3% to a 3.25-month low, reflecting expectations of a renewed supply pipeline following the US and Iran agreement to end their war and reopen the Strait of Hormuz. Lower energy prices also fed into easing inflation expectations, helping support both stocks and bonds.
At the same time, US economic data offered a mixed picture. According to the market summary, May housing starts fell 15.4% month over month to a 6-year low of 1.177 million, while building permits—often viewed as a leading indicator for construction—declined 0.7% to 1.413 million. Both figures were reported as weaker than expectations. Meanwhile, the US May import price index excluding petroleum rose 0.8% month over month, stronger than the 0.5% forecast mentioned in the report.
Traders also appeared to position for the Federal Reserve’s policy path. The report said markets are pricing a relatively small probability of a 25-basis-point rate hike at the conclusion of the two-day meeting.
Market reaction across rates and sectors
In fixed income, the US 10-year Treasury yield dropped about 2 basis points to around 4.45%, a move linked to the sharp decline in oil prices and weaker housing activity. The summary also pointed to hopes for a less hawkish tone from the Fed this week, given that lower energy prices could reduce inflation pressure over time if supply conditions normalize.
European government bonds also moved lower, with the report citing declines in German bund yields and UK gilt yields. According to the summary, revisions in Eurozone labor cost data and a stronger-than-expected German growth expectations survey supported parts of European rates trading, even as equity performance was mixed overseas.
Within equities, stock performance was uneven. Chipmakers and AI infrastructure names provided support. Western Digital rose more than 6% and was cited as a top gainer, while Seagate Technology and Qualcomm were up more than 4%, and other semiconductor and infrastructure-related names also advanced.
Energy-linked weakness was more pronounced. The report attributed declines across energy producers and services largely to the plunge in crude oil, citing multiple companies down more than 1% as oil dropped.
Lower oil prices benefited consumer-facing transport. Airlines and cruise stocks rallied as fuel costs fell, with several carriers up more than 1% and some gaining more than 3% in the report’s rundown. Mining stocks also rose alongside gains in precious and industrial metals, reflecting a broader move in commodities.
Not all groups participated. Cybersecurity names were cited as under pressure, with several large-cap stocks down more than 1% to 2%.
Global cues and company-specific movers
Overseas markets were mixed, according to the report. The Euro Stoxx 50 was up 0.61%, China’s Shanghai Composite slipped 0.11%, and Japan’s Nikkei 225 set a new record high, closing up 0.13%.
Several individual stock moves stood out in the US session summary. Space Exploration Technologies surged more than 13% on continued momentum tied to its recent large IPO, which the report said was heavily oversubscribed. Mobileye Global rose more than 5% after announcing plans to expand robotaxi activities beyond self-driving technology toward full ownership of an autonomous ride-hailing business.
Other notable movers included Huntsman, which dropped more than 13% following an all-stock merger agreement with Olin. Dave & Buster’s Entertainment fell more than 6% after reporting first-quarter revenue below consensus. Tractor Supply shares declined more than 3% after multiple analysts reduced price targets, and Bank of America-related downgrades were cited for declines in Huson Pacific Properties and Tanger.
Bigger picture: Fed watch and commodities
The market’s immediate emphasis remains on the Fed meeting and the Fed’s communication strategy under Kevin Warsh. The report said investors will focus on the post-meeting press conference and the outlook for inflation, particularly as energy prices can quickly influence near-term expectations.
With oil continuing to drive rate-sensitive sentiment and sector rotation—supporting airlines and weighing on energy—traders are likely to keep a close eye on commodity developments and incoming economic data for confirmation of the inflation path.
Next up, investors will watch the Fed’s policy decision and guidance from the two-day meeting that begins Tuesday, along with ongoing updates on housing and inflation-related indicators that could shape expectations for the rest of the year.
