The S&P 500 advanced 66 points, or 0.9%, to 7,840 on Tuesday, marking a fresh all-time high. The Nasdaq 100 gained 0.8% to 31,317, extending its advance for a sixth straight session, while the Dow Jones Industrial Average rose 365 points to 51,632.

Macro indicators and commodity moves

The U.S. trade deficit widened to $105.6 billion in August from $92.8 billion in July, exceeding the $102 billion forecast. Imports rose to $420.8 billion from $403.6 billion, while exports increased to $315.2 billion from $310.7 billion. Treasury yields retreated from a 24-year peak, with the 10-year yield falling 4 bps to 5.27%. The 2-year yield declined 2 bps to 4.80%, and the 30-year slipped 3 bps to 5.63%.

West Texas Intermediate crude slipped about 0.3% to roughly $89.12 per barrel, while Brent crude eased about 0.7% to around $99.64. Gold futures rose 0.7% to $4,188 per ounce, and silver futures climbed 0.5% to $61.60. Bitcoin traded near $85,640, up 0.5% over the past 24 hours.

Market performance snapshot

Major ETFs tracked these moves, with the Vanguard S&P 500 ETF gaining 0.8% and the Invesco QQQ Trust climbing 0.7%. The iShares Russell 2000 ETF slid 0.3%, reflecting weakness in small-cap stocks.

Power stocks lead sector gains

Power producers dominated the leaderboard following news of a major energy agreement. Constellation Energy Corp. surged 13.9% after announcing a 20-year agreement with Google to supply 890 megawatts of nuclear capacity to the PJM grid. Talen Energy Corp. jumped 13.7% and Vistra Corp. gained 11.3% in sympathy. The Utilities Select Sector SPDR Fund rose 1.0%, while the Industrials Select Sector SPDR Fund led sectors with a 2.1% rise.

Corteva Inc. rallied 12.3% after JPMorgan upgraded the stock to Overweight with a $19 price target. The shares also benefited from index-fund buying tied to its move into the S&P MidCap 400. Lamb Weston Holdings Inc. gained 11.7% after reporting fiscal first-quarter earnings of 75 cents per share, ahead of the 59-cent consensus, on net sales of $1.67 billion versus $1.65 billion expected. The company raised its fiscal 2027 adjusted EPS outlook to $3.05 to $3.35, above the $3.01 analyst estimate.

Biotech and storage stocks retreat

On the downside, Tempus AI Inc. fell 10.6%, UWM Holdings Corp. dropped 7.4%, Guardant Health Inc. slid 7.3%, and Caris Life Sciences Inc. declined 7.0% as biotech funds broadly retreated. The iShares Biotechnology ETF tumbled 3.4%. Western Digital Corp. lost 6.5% as reports that Toshiba plans to double its hard-disk drive output weighed on storage stocks, with Seagate Technology Inc. also sharply lower.

Wall Street analysts maintain a "Buy" rating on 60% of S&P 500 stocks, the highest level on record. Strategist Charlie Bilello warns this widespread optimism leaves less room for positive market surprises.

Sector-level analyst ratings

FactSet data indicates that out of 13,097 total ratings on S&P 500 equities, 59.9% are classified as "Buy," 35.5% as "Hold," and 4.7% as "Sell." The concentration of positive recommendations varies across sectors. Communication Services and Information Technology lead with 70% of stocks carrying a "Buy" rating. Energy and Materials follow at 64%, while Health Care sits at 61%. Consumer Staples registers the lowest percentage at 45%.

Earnings revisions and valuation metrics

This surge in optimism coincides with an unusual upward trajectory in corporate earnings expectations. Typically, analysts reduce estimates as reporting dates approach, but estimates have increased heading into the third quarter of 2026. The estimated year-over-year earnings growth rate for the index stands at 29.5%. If achieved, this would mark the third consecutive quarter of earnings growth surpassing 25%.

Despite record buy ratings, valuation metrics remain moderate. The forward 12-month price-to-earnings ratio is 19.0, below its five-year average of 19.8 and ten-year average of 19.1. Analysts project a 21.3% increase in the index's price over the next 12 months based on bottom-up target estimates.

What the numbers show

The divergence between record-high sentiment and moderate valuation multiples suggests the market is pricing in sustained high growth rather than speculative expansion. With the forward P/E at 19.0 sitting below long-term averages, the primary risk to the current setup is not valuation compression but earnings delivery. If the projected 29.5% growth rate fails to materialize, the lack of downside analyst coverage (only 4.7% Sell ratings) could accelerate volatility as consensus adjusts downward.

Market performance in 2026

The S&P 500 has advanced 12.60% year-to-date. The Nasdaq Composite rose 17.02%, while the Dow Jones gained 5.78%. On Thursday, the SPDR S&P 500 ETF Trust (SPY) closed higher at $769.64, up 0.74%. The Invesco QQQ Trust ETF (QQQ) rose 1.02% to $749.58. The State Street SPDR Dow Jones Industrial Average ETF Trust (DIA) ended 0.49% higher at $511.10. In premarket trading on Monday, SPY fell 0.19%, QQQ dropped 0.27%, and DIA declined 0.14%.