US stocks mostly closed higher on Tuesday as falling Treasury yields, lower oil prices and stronger-than-expected corporate results helped investors look past weak housing data. The Dow Jones Industrial Average rose 1% to 52,495, gaining 529 points from the previous session. The S&P 500 added 0.3% to 7,712, while the Nasdaq Composite slipped slightly to 26,424.
Falling yields and oil ease pressure on equities
The 10-year US Treasury yield fell 2.1 basis points to 5.115%, while the 30-year yield declined 5 basis points to 5.423%. The retreat in longer-term yields supported the major equity indexes and eased some of the interest-rate pressure on highly valued technology stocks.
In energy markets, front-month West Texas Intermediate crude fell 0.9% to settle at $102.75 a barrel. Oil is still up nearly 14% this month, however, leaving energy costs and inflation pressures as variables investors continue to monitor.
Netflix and SpaceX were also due to release earnings or business updates after the close. Netflix shares fell 1.7% during Tuesday's session, while SpaceX-related shares declined 0.1%.
3M jumps 5.8% on earnings and Amazon agreement
3M was the best-performing Dow component, rising 5.8% for its largest one-day gain since July. Third-quarter earnings came in at $2.50 per share, up 14.2% year over year and above Wall Street expectations. Revenue rose 4.2% to $6.6 billion, although it was slightly below analysts' forecasts.
The company also raised its full-year earnings outlook, now expecting adjusted earnings of $9.10 to $9.15 per share, compared with its previous forecast of $8.80 to $8.95. The earnings beat and higher guidance were the immediate drivers of the stock's advance.
3M also announced an expanded commercial partnership with Amazon covering the deployment and expansion of its optical interconnect products and other data-center products. Under a regulatory filing by 3M, Amazon may purchase up to 3.2 million 3M shares over the next seven years. The right is subject to several milestone conditions, including 3M reaching $6 billion in data-center-related product sales.
The arrangement links part of 3M's performance outlook to demand for data-center infrastructure and could make Amazon a shareholder in the partnership. The share-purchase right is not immediately exercisable, and the final number of shares will depend on the sales target and other agreed conditions.
Ally Financial raises quarterly dividend by 17%
Ally Financial shares gained 1% after the online bank reported third-quarter earnings of $1.34 per share, up 16% from a year earlier. Revenue increased 9% to $2.3 billion, with both figures exceeding market expectations.
The company's board also approved a 17% increase in its quarterly dividend. It was Ally Financial's first dividend increase since late 2021, reflecting a plan to raise shareholder returns as profitability improves. For financial-stock investors, the combination of stronger earnings and improved capital allocation supported the shares during the session.
Salesforce to buy Braze in deal valued at $5.66 billion
Shares of customer-engagement platform Braze surged 51.7% after Salesforce announced an all-cash acquisition valued at approximately $5.66 billion. Salesforce expects the transaction to close in fiscal 2028, subject to closing conditions and relevant approvals.
Salesforce said Braze's real-time customer engagement and artificial-intelligence decisioning capabilities would complement its four-layer architecture of Data 360, Customer 360, Agentforce and SIForce. The deal would broaden Salesforce's data and customer-engagement tools for enterprise clients, while the all-cash offer gives Braze shareholders a substantial repricing of the stock.
Earlier this month, Bank of America Securities analyst Tal Liani raised his rating on Salesforce by two levels, from "Underperform" to "Buy." Liani had previously been concerned that artificial intelligence could weaken the value of enterprise software platforms. He wrote that large companies were unlikely to replace platforms supporting business logic, data, workflows and compliance frameworks. In his view, AI could instead deepen enterprise reliance on those platforms, and Salesforce has a credible AI strategy and strong free-cash-flow generation.
Housing starts and pending sales weaken together
US Census Bureau data showed that seasonally adjusted building permits fell 0.2% in September from August to an annualized 1.4 million units. Housing starts dropped 5.2% month over month to 1.2 million units. September starts were the second-lowest level since the pandemic recession in 2020, indicating that high home prices and financing costs continue to constrain residential construction.
Interactive Brokers senior economist José Torres said affordability pressures were weakening momentum in the housing market and prompting builders to slow construction. He noted that building permits were relatively less weak because developers were more inclined to pursue apartment rental projects than single-family homes.
Separate data from the National Association of Realtors showed pending home sales fell 7.3% in September from August and 11.3% from a year earlier. Torres said elevated mortgage rates and high home valuations were offsetting support from a stronger stock market, healthy hiring conditions and a relatively moderate unemployment rate.
Tuesday's trading reflected a split between corporate developments and macroeconomic data. 3M benefited from its Amazon partnership and higher guidance, Braze rallied on the Salesforce takeover plan, and Ally Financial gained after improving earnings and dividend policy. At the same time, declines in housing starts and pending home sales showed that high borrowing costs continue to weigh on both housing demand and construction activity.