S&P 500 Sets a Record as Investors Look to Corporate Profits

U.S. stocks reached a new closing record on Tuesday, October 6. The S&P 500 gained 0.6% to 7,818.93, topping its previous record from August. The Dow rose 0.5% to 51,521.28, and the Nasdaq added 0.4% to 27,599.79. The small-company Russell 2000 fell 0.6%, so the advance did not extend across every major index.

The Associated Press cited improving corporate-profit expectations, company-specific results and a pullback in Treasury yields. The 10-year Treasury yield eased to 5.28% from 5.31% late Monday. Investors are looking ahead to quarterly earnings; expectations for S&P 500 earnings growth are not the same as reported results, and companies still have to deliver them. Higher yields can raise borrowing costs for households and businesses, while a rising stock index does not show that household budgets have improved. The next earnings reports will test whether profits match the optimism reflected in share prices.