US stocks hit fresh records as oil stabilizes on rising supplies

On Tuesday, US stock markets reached fresh highs as the Nasdaq and S&P 500 indexes surged to new records. This rally was driven by a stabilizing oil market, as prices dipped due to increased supplies easing supply concerns and rising inflation fears. The technology-focused Nasdaq index climbed 0.5 percent, while the S&P 500 added 0.6 percent.

The positive momentum in New York markets spurred gains across European and Asian stock markets. Oil prices softened as Gulf exports inch back towards pre-war levels, with Brent North Sea crude nearing the $100 per barrel mark. This decline in oil prices provided a boost to interest-rate sensitive stocks, including real estate and consumer cyclicals.

However, the Middle East crisis and concerns over central banks raising interest rates to combat energy-fueled inflation have raised uncertainties among traders. This uncertainty has led to a surge in government bond yields, raising concerns about ballooning debt. The rapid expansion of AI data centers, servers, and chips has also contributed to this debt problem, as tech giants like Google, Amazon, and Microsoft borrowed around $500 billion in the last nine months.

Analysts warn that if the AI story falters, it could cause a significant downturn in the tech sector. UK online fashion retailer Asos saw its share price drop over nine percent following reports of a mobile notification claiming a system hack. Meanwhile, media conglomerate Paramount completed its acquisition of Warner Bros. Discovery, uniting two major Hollywood studios under the leadership of David Ellison.