The Dow leaps to a record as oil prices ease and US stocks outside of AI rally

Wall Street rallied on Thursday after oil prices and bond yields eased, lifting the Dow Jones Industrial Average by 874 points to a record high. The S&P 500 rose 0.4% for its 10th gain in the past 11 days, while the Nasdaq composite slipped slightly. A 2.8% drop in Brent crude oil prices to $95.03 per barrel contributed to the gains, as investors anticipated a potential reopening of the Strait of Hormuz by the U.S. and Iran, easing inflationary pressures. Stocks of smaller companies surged, with the Russell 2000 index jumping 1.4%, benefiting from lower interest rates. The yield on the 10-year Treasury dipped to 4.47%, reducing borrowing costs for businesses. Banks also led gains, with Goldman Sachs up 5%, Fifth Third Bancorp rising 4.7%, and U.S. Bancorp climbing 4.4%. AI stocks faced a correction despite strong earnings. Broadcom fell 12.6%, though its AI semiconductor revenue more than doubled to $10.8 billion, with CEO Hock Tan forecasting 200% growth in the current quarter. Micron Technology dropped 7.7% after its market value exceeded $1 trillion due to AI demand. CrowdStrike Holdings fell 3.8%, despite beating earnings expectations, as its stock surged 59.5% year-to-date. Analysts suggested AI stocks may have been overvalued, signaling a potential slowdown after nine straight winning weeks for the S&P 500. Lower yields and easing oil prices helped broaden market gains beyond AI-focused equities, with smaller companies and banks outperforming. The market’s shift reflected broader expectations of cooling inflation and improved economic conditions.