Tuesday's session produced another solid advance for the stock market, with broad participation and lower Treasury yields helping the S&P 500 (+0.6%) reach its first record high since August 13. The benchmark also closed above 7,800 for the first time, while the Nasdaq Composite (+0.5%) established fresh record highs of its own and the DJIA (+0.5%) posted a comparable gain.

The major averages finished well off their best levels, however, after spending much of the afternoon drifting sideways before giving back some additional ground late in the session. The S&P Mid Cap 400 (+0.6%) still participated in the advance, while the Russell 2000 (-0.6%) stood out as the clear laggard after surrendering an early gain.

Participation beneath the surface remained notably healthy for a second consecutive session. Ten of the 11 S&P 500 sectors finished higher, marking another departure from the narrow leadership that had characterized much of the market's recent action. Lower Treasury yields provided a favorable backdrop, particularly for rate-sensitive areas, even as crude oil recovered from a sharp overnight decline.

The utilities sector (+3.0%) was the clear leader, fueled by a surge in Constellation Energy (CEG 300.40, +32.78, +12.25%) after the company announced a 20-year power purchase agreement with Alphabet (GOOG 344.59, +0.76, +0.22%) supporting 890 MW of new nuclear capacity through upgrades at 11 existing units across six sites in the PJM grid. Vistra Corp. (VST 160.48, +15.59, +10.76%) and NRG Energy (NRG 103.62, +6.82, +7.05%) also posted sizable gains, leaving several electric utility names among the day's strongest S&P 500 performers.

The consumer discretionary sector (+1.4%) and real estate sector (+1.1%) were also standouts. Mega-cap stocks generally contributed to the advance, reflected in a 0.6% gain for the Vanguard Mega Cap Growth ETF, while lower yields and oil-sensitive names provided additional support. The consumer staples sector (+1.0%) rounded out the day's strongest-performing areas.

The information technology sector (+0.6%) finished higher, although some of its earlier momentum faded. The PHLX Semiconductor Index (+0.3%) ended well off its session high as NVIDIA (NVDA 239.27, +0.37, +0.15%) encountered some profit-taking after reaching a fresh record high and other semiconductor names also backed away from their best levels.

There were still several notable AI-related winners. Marvell (MRVL 287.01, +15.76, +5.81%) surged after management raised its FY28 revenue outlook to $20 billion from $18 billion on stronger optics and switching demand, while Advanced Micro Devices (AMD 649.42, +17.67, +2.80%) rallied after saying it plans to increase supply in 2027 in response to strong AI-product demand, according to Reuters. Citi also raised its price target on AMD to $800 from $575 based on increased CPU demand from agentic applications.

Strength extended into other parts of the technology landscape. Ciena (CIEN 443.66, +53.97, +13.85%) and Corning (GLW 168.98, +9.61, +6.03%) posted sizable gains as Marvell's bullish guidance provided additional reassurance about demand for optical connectivity products. Hewlett Packard Enterprise (HPE 70.56, +2.20, +3.22%) reached a fresh all-time high amid continued strength in AI infrastructure and networking demand.

Conversely, Seagate Tech (STX 805.63, -81.46, -9.18%) and Western Digital (WDC 411.04, -30.60, -6.93%) sold off sharply as reports of a bidding contest for TDK's magnetic-head business added to recent concerns about HDD industry competition.

The health care sector (-0.2%) was the lone sector to finish lower, weighed down by weakness across biotechnology stocks. The iShares Biotechnology ETF fell 2.3%, with Moderna (MRNA 187.46, -15.75, -7.75%) among the notable decliners after reversing an opening gain.

Crude oil ultimately had little influence on the broader market despite a sizable intraday recovery. WTI crude settled $0.11 higher (+0.1%) at $89.44 per barrel after briefly falling below $87 overnight. Bloomberg also reported during the afternoon that Iran is increasing attacks on ships transiting the Strait of Hormuz as oil shipments through the waterway approach pre-war levels.

Tuesday therefore provided another encouraging showing beneath the surface ahead of earnings season. Technology and mega-cap stocks remained important contributors, but gains across ten sectors and lower Treasury yields helped broaden the advance as the S&P 500 and Nasdaq established fresh records.

U.S. Treasuries climbed on Tuesday, with the long bond reclaiming the bulk of loss from Monday while the 10-year note and shorter tenors turned positive for the week. Treasuries held their ground through today's $58 billion 3-year note sale, which was absorbed well by the market, but saw below-average foreign demand, ahead of tomorrow's $39 billion 10-year note reopening. The 2-year note yield settled down four basis points to 4.79%, and the 10-year note yield settled down four basis points to 5.27%. 

• Nasdaq Composite: +18.8% YTD
• S&P 500: +14.0% YTD
• Russell 2000: +14.1% YTD
• S&P Mid Cap 400: +11.9% YTD
• DJIA: +7.2% YTD

Reviewing today's data:

• The trade deficit widened in August to $105.6 billion (Briefing.com consensus: -$93.7 billion) from a downwardly revised $92.8 billion (from -$88.6 billion) in July. Exports were $4.5 billion more than July exports, but imports were $17.2 billion more than July imports.
  • The key takeaway is that demand for crude oil and semiconductors helped drive the increase in exports and imports and can be looked at in part as a good sign for global economic activity.