By Tharuniyaa Lakshmi and Shashwat Chauhan
Oct 6 (Reuters) - The benchmark S&P 500 and the Nasdaq hit record highs on Tuesday as Treasury yields eased from multi-year highs and oil prices fell, while investors looked ahead to the upcoming quarterly earnings season.
Most of the 'Magnificent Seven' stocks edged higher in early trading, with Meta, Tesla and Amazon.com all up. Apple and Alphabet were outliers, down about 0.2% each.
Chip designer Nvidia climbed 1.2%, pushing the market valuation of the world's
most valuable company close to the $6 trillion mark.
"The space that I think is being looked at as what's going to do the best is information technology," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
"The expectation for everybody else is pretty much lower except for energy. The higher energy prices are going to have a negative impact on consumer spending."
Optimism surrounding the AI trade and hopes of strong corporate earnings lifted technology stocks, further boosting the bull market that began in October 2022.
The yield on 30-year Treasury bonds held steady at 5.66%, while the yield on the benchmark 10-year bond dipped 2.1 basis points to 5.28%.
A softer-than-expected payrolls report last week eased expectations around rate hikes this year. Traders now see a 78% chance of the Federal Reserve holding interest rates steady this month, though a December rate hike remains largely priced in, according to the CME Group's FedWatch tool.
On Tuesday, at least four Fed officials, including New York Fed President John Williams, are slated to deliver public remarks.
Nine of 11 sectors on the S&P 500 were trading higher, with utilities and healthcare leading the gains.
At 09:47 a.m. ET, the Dow Jones Industrial Average rose 243.69 points, or 0.48%, to 51,511.59, the S&P 500 gained 43.17 points, or 0.56%, to 7,817.12 and the Nasdaq Composite gained 173.61 points, or 0.63%, to 27,650.92.
Oil prices, meanwhile, fell over 2% as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns. S&P 500 energy stocks eased 0.6%.
The third-quarter earnings season will kick off next week. Analysts on average expect S&P 500 earnings to jump over 30% year over year in the quarter, thanks largely to AI-related stocks, according to LSEG data.
Chipmaker AMD climbed almost 1% after CEO Lisa Su said the company planned to substantially increase chip supply in 2027 to meet booming AI demand.
Constellation Energy was the top gainer on the S&P 500, up 12.9% after Alphabet's Google entered into a 3,590-megawatt power deal with the company.
Option Care Health jumped 32.9% after drug distributor McKesson and private equity firm Clayton Dubilier & Rice agreed to buy the infusion therapy provider in a deal worth about $5.8 billion, including debt.
Advancing issues outnumbered decliners by a 1.91-to-1 ratio on the NYSE and by a 1.64-to-1 ratio on the Nasdaq.
The S&P 500 posted 18 new 52-week highs and one new low, while the Nasdaq Composite recorded 39 new highs and 63 new lows.
(Reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel and Shinjini Ganguli)
