Dow Jumps 530 Points to a One-Month High as Health Care Leads Wall Street

The Dow Jones Industrial Average jumped 529.85 points, or 1.02 percent, to close at 52,495.88 on Tuesday, October 20, its best closing level in more than a month. The S&P 500 rose 21.84 points, or 0.28 percent, to 7,712.57, a second straight gain. The Nasdaq Composite barely moved, down 6.07 points, or 0.02 percent, to 26,424.82. Small stocks joined the rise, with the Russell 2000 up 1.65 percent to 2,773.42.

The day belonged to steadier parts of the market. Health care led the eleven S&P 500 sectors and closed at a record high, Reuters reported. Eli Lilly rose 3.75 percent, Amgen rose 3.29 percent, Merck rose 3.25 percent, UnitedHealth rose 3.06 percent and Johnson and Johnson rose 2.21 percent. Moderna touched its highest level since 2022. Technology fell 0.34 percent and communication services fell 0.89 percent, the only two sectors to end lower, with Meta, Alphabet and Netflix among the weakest names.

Earnings and a big deal move single stocks

3M rose nearly 6 percent after it beat third quarter forecasts, raised its full year profit outlook to $9.10 to $9.15 a share and widened a data centre partnership with Amazon. Equifax and Hasbro each jumped more than 11 percent on their results. General Motors went the other way, down 6.83 percent. GM beat profit estimates and announced a $20 billion buyback, then lowered its full year outlook, pointing to higher commodity costs and weaker truck sales.

One deal stood out. Salesforce agreed to buy Braze, a customer engagement software maker, for about $5.66 billion. Braze shareholders will get $47.50 a share in cash, about 58 percent above the Monday close of $30.04. Braze stock closed up 51.7 percent at $45.57, while Salesforce ended almost flat. The deal needs shareholder and regulatory approval and is expected to close in the fiscal 2028 year at Salesforce.

Oil falls as Iran talk swirls

Oil helped the mood late in the day. The November West Texas Intermediate contract settled 1.8 percent lower at $101.79 a barrel, ending a run of eight straight settlement gains. Brent crude fell 0.7 percent to $108.79 a barrel. Prices dropped after Al-Araby Al-Jadeed reported that negotiators from Qatar and Pakistan had offered a compromise plan to end the war between the United States and Iran. Neither country confirmed the report, and traders treated it with care. The yield on the ten year Treasury note fell three basis points to 5.12 percent.

Jim Baird of Plante Moran told Reuters that equity investors are still a little skeptical about the AI trade and whether some companies can turn heavy spending into profit, so money is rotating into other parts of the market. Russ Mould, investment director at AJ Bell, said that concern raises the stakes ahead of earnings from key AI names. Tesla and Meta report later this week, and Netflix posted a fourth quarter forecast below Wall Street estimates after the close on Tuesday.

In Europe, the FTSE 100 in London fell 0.3 percent, Paris fell 0.4 percent and Frankfurt ended almost flat. In Asia, Tokyo fell 1.3 percent, Seoul fell 3.7 percent and Hong Kong fell 1.3 percent, while Shanghai added 0.1 percent.