U.S. equities near record highs as earnings and AI boost rally

U.S. equity markets closed Tuesday close to historic peaks, with the S&P 500 up 0.8% and poised to surpass its August record, the Dow gaining 0.7% and the Nasdaq adding 0.8% to its own recent high. The rally persisted despite concerns over the Iran conflict, rising inflation and elevated bond yields, thanks largely to robust corporate profit reports. Lamb Weston reported earnings and revenue ahead of forecasts, sending its shares up 11.9% and prompting an upgraded full-year profit outlook.

AI-focused firms and Constellation Energy, which secured a long-term power supply deal with Google, also lifted the market. Meanwhile, Brent crude fell 1.1% to $99.19 a barrel, easing price pressures and pulling the 10-year Treasury yield down to 5.26%. Option Care Health surged 32.9% after CD&R and McKesson announced a $5.8 billion acquisition.