The S&P 500 climbed to a new intraday record on Tuesday, lifted by gains in key technology shares and a drop in U.S. Treasury yields.

The broad market index rose 0.58% to close at a record 7,818.93, while the Dow Jones Industrial Average added 253.38 points, or 0.49%, to finish at 51,521.28. The Nasdaq Composite advanced 0.45% to end at a record 27,599.79, with the tech-heavy index also notching an all-time intraday high.

Chipmakers powered the rally. Marvell Technology (NASDAQ: MRVL) jumped 5.8%, and Advanced Micro Devices (NASDAQ: AMD) gained nearly 3%, as investors grew more optimistic about both companies' prospects. Other firms such as Broadcom rose 3.7%.

"Everyone feels the market is going up. AI is where you want to be," said Stephen Kolano, chief investment officer at Integrated Financial Partners. Investors are "currently ignoring inflation worries, especially those tied to oil, diesel and the like. It's like, 'Okay, this is something that may get resolved down the road.'"

Oil prices finished roughly flat on the day. Brent crude rose 0.26% to $100.58 a barrel, while West Texas Intermediate futures edged up just 0.01% to $89.44 a barrel.

Kolano also said interest rates are "fundamentally about where they need to be." The benchmark 10-year Treasury yield fell more than 4 basis points to 5.262%, and the 30-year yield dropped more than 3 basis points to 5.631%. Both had touched levels on Monday not seen since 2002.

U.S. Treasury Secretary Scott Bessent insisted the government's debt burden is manageable. Bessent sought to reassure investors that a combination of economic growth and spending restraint would "soon" begin to change Washington's borrowing trajectory. Speaking at a fireside chat in Pennsylvania on Monday evening, he said the government would start to "turn this trend around."

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said in a note to clients that the bond market has been highly volatile over the past six weeks. She attributed the swings to a possible new Federal Reserve policy framework, the growth outlook, elevated oil prices and the ongoing Middle East conflict.

"While intraday implied volatility has picked up, the level over these six weeks has not reached the extremes seen when the 2022 U.S. equity bear market erupted," Shalett wrote.

Traders are awaiting the minutes of the Fed's September policy meeting due on Wednesday, which could shed light on the thinking behind policymakers' rate decision. Beyond the decline in Treasury yields, Tuesday's drop in oil prices also provided support for stocks. Brent crude futures fell 2% to about $98 a barrel, and WTI futures slid 2% to around $87 a barrel.

U.S. stocks closed higher the previous session, with the Nasdaq Composite setting a record high, and the tech-heavy index looks poised to extend its gains to another record.

In Asian markets: Japan's Nikkei 225 rose 0.29% on Tuesday; South Korea's Kospi fell 0.23%; Australia's S&P/ASX 200 gained 0.53%; Hong Kong's Hang Seng Index added 0.95%; and mainland Chinese markets were closed for the Golden Week holiday.

The U.S. trade deficit widened back to levels seen before President Trump introduced reciprocal tariff policies early last year. The Commerce Department said Tuesday that the August trade gap reached $105.6 billion, the highest since March 2025, when the deficit stood at $132.98 billion. The figure also exceeded the $102 billion economists surveyed by Dow Jones had expected.

The dollar index also touched a session low of 101.754, its weakest level since Oct. 2, when it dipped to 101.668.

Investors are starting to say "no" to lofty AI valuations, and Wall Street IPO activity has slumped sharply. Equity capital markets activity on Wall Street has slowed to a trickle, with weak demand for new share sales and concerns about excessive valuations weighing on a quarter that had been expected to bring a listing boom. Delays to listings by Anthropic and OpenAI have also dented sentiment in the U.S. equity capital markets.

"No one cares about anything other than Anthropic right now," said the head of equity capital markets at a large U.S. asset manager. Investment bankers enjoyed a strong year in large part thanks to SpaceX's June IPO. But growing worries about an AI industry downturn and public opposition to data centers have caused the IPO market to dry up in recent weeks. The banker added that investors are increasingly questioning the "out-of-touch" valuations commanded by companies tied to the AI investment boom. Data from BCA Research shows that technology companies that listed this year have seen their shares fall about 23% on average since their first day of trading, further fueling concerns that banks underpriced deals too aggressively to win underwriting mandates.