US stocks rise as healthcare shares hit record highs and oil prices fall

US stocks climbed on Tuesday as a rally across healthcare shares and a decline in oil prices lifted sentiment, helping Wall Street build on a rebound from the previous week's technology selloff.

Healthcare stocks led the broader market higher, with the S&P 500 Healthcare index touching an all-time record. Strong gains across major pharmaceutical and managed care companies offset lingering nervousness over artificial intelligence infrastructure costs and mixed corporate quarterly reports.

What moved the indexes

Oil prices eased after an unsettled session in which global benchmark Brent crude briefly reached a five-month peak. Brent fell between 1.1% and 1.3% as traders weighed reports of regional security threats in the Middle East, including drone strikes on Saudi infrastructure and commercial vessel disruptions in the Gulf. The retreat in crude brought relief to equity investors worried about renewed inflationary pressure and energy supply shocks.

At midday in New York, the Dow Jones Industrial Average was trading up 0.97% at 52,468.06, while the S&P 500 gained 0.42% to reach 7,723.06. The tech-focused Nasdaq Composite rose 0.22% to 26,489.60. Market breadth remained positive, with advancing shares topping decliners by roughly 2.5 to 1 on the New York Stock Exchange and 2.8 to 1 on the Nasdaq.

Healthcare surge and corporate earnings

Eli Lilly hit record highs, gaining as much as 5.6% to reach $1,309, while UnitedHealth advanced more than 3% to trade at $419.79. Other major pharmaceuticals, including Amgen, Pfizer, Johnson & Johnson, and AbbVie, all rose by more than 2%. Financial shares also supported the broader market, advancing over 1%.

Corporate earnings drove sharp swings across individual company shares:

• Equifax jumped between 9.6% and 11.4% after delivering third-quarter profit figures that beat analyst estimates.
• 3M rose more than 5% following an expansion of its cloud data-centre partnership with Amazon and an upgrade to its full-year earnings outlook.
• Hasbro gained 5.6% after raising guidance for both annual revenue and its digital gaming unit.
• General Motors tumbled between 5.3% and 6.9% after issuing an annual earnings outlook below expectations, citing higher raw material costs and cooling truck demand.
• Steel Dynamics slipped over 1% after falling short of quarterly consensus earnings.

Tech sentiment and what happens next

Technology names had a mixed session as markets continued to digest the capital requirements of AI development following last week's debt-fuelled volatility around cloud provider CoreWeave. CoreWeave shares rose between 1.6% and 2.5%, and the Philadelphia Semiconductor index gained up to 0.7%.

Robert Pavlik, senior portfolio manager at Dakota Wealth, noted that Dow strength in high-value shares helped buoy the market even as AI-related semiconductor names face ongoing scrutiny.

Outside the United States, concerns over artificial intelligence valuations were underscored when South Korean AI infrastructure firm Elice Group plunged nearly 30% on its public market debut, dropping well below its initial public offering price.

Attention now shifts to after-hours earnings reports from streaming giant Netflix and commercial aerospace operator SpaceX, followed on Wednesday by quarterly results from Meta Platforms and Tesla.