U.S. stock index futures and major benchmarks moved higher on Tuesday after crude oil pulled back from its overnight highs, helping ease pressure on bond yields. The S&P 500 rose 0.50%, the Dow Jones Industrial Average gained 0.79%, while the Nasdaq 100 was up 0.17% as investors rotated toward a slightly more supportive rates backdrop.
Market direction also followed comments from New York Fed President John Williams, who said inflation is continuing to trend down, reinforcing expectations that monetary policy may be less restrictive than markets previously priced. At the same time, mixed data—including July factory orders and the latest ADP labor report—kept the outlook uneven for equities as investors weighed growth strength against cooling inflation momentum.
Key takeaways
- Indexes rose: The S&P 500 gained 0.50% as yields retreated; the Dow added 0.79%, while the Nasdaq 100 rose 0.17%.
- Oil moved, yields followed: Crude prices fell from a 6-week high after supply concerns eased, with the 10-year Treasury yield down 1 bp to 4.79%.
- Fed tone supported risk assets: Williams’ remarks pointed to inflation moving slowly lower, underpinning the market’s bias.
- Mixed macro signals: July factory orders beat expectations, while ADP employment growth came in below forecasts.
- Earnings remain a tailwind: Bloomberg Intelligence data cited an outlook for strong Q2 earnings growth, helping offset macro uncertainty.
What drove the move
Futures climbed after an overnight retreat in crude oil prices reduced upward pressure on bond yields. The shift in commodities sentiment came after U.S. Energy Secretary Wright said more than 17 million barrels of oil passed through the Strait of Hormuz on Monday, easing some supply concerns that had supported oil earlier.
Earlier in the day, oil had rallied as geopolitical tensions between the U.S. and Iran escalated, including reports of additional U.S. strikes targeting radar systems and mine-laying capabilities along Iran’s southern coast, and retaliatory drone and missile attacks on U.S. bases across the Middle East. The market’s sensitivity to those developments translated directly into moves in Treasury yields, which had been elevated when crude rose.
In rates, the 10-year Treasury yield fell 1 bp to 4.79% as inflation expectations appeared to cool alongside crude’s pullback. That allowed stocks to regain momentum after a weaker overnight tone.
Market reaction and what investors focused on
Investors continued to weigh whether high yields would persist or unwind. Data cited in the report showed broader global bond weakness earlier in the session: the UK 10-year gilt yield hit a 19-year high of 5.29%, Germany’s 10-year bund rose to a 15-year high of 3.39%, and Japan’s 10-year JGB yield reached a 30-year high of 3.04%. In the U.S., the 10-year Treasury previously rose to a 2.75-year high of 4.82% before reversing.
Economic releases were mixed. The Aug ADP employment change rose by 38,000, below the 47,000 expected in the report. Meanwhile, July factory orders increased 0.9% month over month, beating the 0.7% expectation, with factory orders excluding transportation up 0.6% versus 0.4% expected.
New York Fed President John Williams also contributed to the risk-asset tone. The report said Williams stated, “The data recently has been encouraging,” adding that he is seeing the inflation trend move slowly down as tariff effects move out of the near-term view.
How earnings and company news shaped trading
Stocks also drew support from the direction of second-quarter results. According to Bloomberg Intelligence data cited in the report, the S&P 500 is tracking for earnings growth of almost 32% in Q2, above projections of 23%, and nearly four times the average earnings growth rate outside the Covid period since Q4 2013. The report further stated that, so far, 86% of the 489 S&P 500 companies that have reported beat estimates.
In sector leadership, chip stocks provided a visible boost. Nvidia rose more than 3% to lead gainers in the Nasdaq 100 and the Dow, with other semiconductor names including NXP Semiconductors and Microchip Technology also trading higher.
Airline and cruise operators rose in tandem with lower oil prices. United Airlines was up more than 4%, Alaska Air Group gained more than 3%, and several other carriers—including Delta Air Lines, Southwest Airlines, and Norwegian Cruise Line—were also higher on the day.
Company-specific moves cut across the tape. Gitlab shares jumped more than 16% after the company raised its 2027 revenue forecast, according to the report. Dell Technologies rose more than 4% after reporting Q2 total net revenue above consensus and increasing its 2027 revenue forecast. Brown-Forman climbed more than 3% after reporting a better-than-expected Q1 gross margin.
Not all earnings responses were positive. Palo Alto Networks fell more than 7% after reporting Q4 subscription and support revenue slightly below consensus. Credo Technology dropped more than 18% even though the report said its Q EPS was better than expected, citing that adjusted gross margin did not exceed the company’s Q1 estimate. MongoDB also declined more than 9% despite better-than-expected Q2 EPS, as growth in Atlas did not accelerate versus Q1.
Bigger picture: rates, policy expectations, and overseas markets
Rate expectations remained a key driver. The report said markets were pricing a 67% chance of a 25-basis-point rate hike at the next FOMC meeting on September 15–16. In Europe, Bundesbank President Joachim Nagel warned that inflation is not yet near the medium-term target, and the report said markets are discounting a 99% chance of a 25-basis-point ECB hike at its September 10 meeting.
Overseas, trading was mixed to weaker. Euro Stoxx 50 fell to a one-month low, China’s Shanghai Composite closed down 0.97%, and Japan’s Nikkei-225 slid 2.85% to a four-week low, according to the report.
What to watch next
Investors will likely monitor whether crude’s pullback sustains the decline in yields, given the market’s demonstrated sensitivity to energy-driven inflation fears. Attention will also stay on upcoming macro updates and central-bank guidance, with the next round of company earnings set to continue, including results from Broadcom, Hewlett Packard Enterprise, and Snowflake later on September 2, 2026.
