Dow hits record 53,178 as tech rebound, oil slide lift markets

Wall Street opened August with all three major benchmarks at or near records as a rebound in AI-linked megacap stocks and a sharp drop in crude prices eased inflation concerns.

The Dow rose 1.32% to a record 53,178.41 as a rebound in big technology stocks and falling crude prices lifted Wall Street into August.

"Investors are watching oil prices and the 10-year yield every day. If that's going lower, the market's OK," Art Hogan, chief market strategist at B. Riley Wealth, said.

The S&P 500 climbed 1.48% to 7,600.50, a fresh all-time high, while the Nasdaq Composite advanced 2.13% to 25,913.90. Communication services led the S&P 500's 11 sectors, rising more than 4%, as Meta Platforms gained 6.02% and Alphabet added 4.88%. Microsoft advanced 4.93%. Energy was the weakest sector as crude prices fell.

The rally sets up a test this week: Friday's July jobs report, with economists projecting 85,000 new positions, will shape whether the Federal Reserve raises rates in September. Caterpillar reports second-quarter earnings Tuesday.

Amazon tops $3 trillion as AI spending fears ease

Amazon surged 4.58% to a record, pushing its market capitalization above $3 trillion for the first time after last week's earnings showed accelerating growth at Amazon Web Services. It is the fifth company to cross that threshold, after Apple, Microsoft, Alphabet and NVIDIA, which rose 2.93%. The gains mark a reversal from July, when technology stocks sold off on concern that heavy AI investment was not translating into profit. Results from 304 S&P 500 companies showed aggregate profit growth of 29.3%, with 85.2% beating analyst estimates, according to LSEG data.

Oil slides as Iran talks ease supply risk

Brent crude fell 7% to $83.77 a barrel and West Texas Intermediate dropped 5.1% to $80.34 after President Donald Trump said planned strikes on Iran were called off and negotiations to reopen the Strait of Hormuz would resume. Iran disputed that talks were scheduled, keeping oil exposed to a pullback. The drop in crude pushed the 10-year Treasury yield down 5.52 basis points to 4.69% and the Cboe Volatility Index to 15.71, down 1.75%.

Boeing rose 7.93%, the Dow's biggest percentage gainer, after the Federal Aviation Administration certified the 737 MAX 7, ending nearly a decade of evaluation. Caterpillar climbed 2.24% and Sherwin-Williams gained 3.78%, with six stocks accounting for an estimated 86.8% of the Dow's advance. Breadth was broad: 19 of 30 Dow components rose and NYSE advancers led decliners by 2.41 to 1. The ISM manufacturing index climbed to 55.6 in July, its strongest reading since May 2022.

This article is for informational purposes only and does not constitute investment advice.