Wall Street roared to fresh records Tuesday as strong corporate earnings and signs of possible progress between the United States and Iran sent stocks surging and oil prices tumbling.
The S&P 500 jumped 1.79% to close at a record 7,736.52, marking its first new high since June. The Dow Jones Industrial Average climbed 907.47 points, or 1.71%, to finish at a record 54,085.88.
The tech-heavy Nasdaq Composite posted the biggest gain of the day, soaring 2.59% to 26,584.99 as investors piled back into artificial intelligence and semiconductor stocks.
Markets received another jolt after Treasury Secretary Scott Bessent revealed that the Trump administration was speaking with Iran amid efforts to reopen the Strait of Hormuz and calm the conflict.
“we are in talks with the Iranians,” Bessent said during an interview on CNBC’s “Squawk Box.”
He then added, “There is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict.”
The remarks fueled hopes that one of the world’s most important oil routes could soon reopen, easing fears of a prolonged energy shock.
West Texas Intermediate crude futures dropped 5.69% to settle at $75.77 per barrel. Brent crude, the international benchmark, fell 5.26% to $79.36 per barrel.
Technology stocks led the broad rally, with the sector climbing roughly 4%.
Palantir Technologies exploded 29% after reporting blockbuster second-quarter results. CEO Alex Karp described the company’s performance as “otherworldly” as demand for artificial intelligence and national security technology continued to accelerate.
S&P 500 Hits Record High on Earnings Beat
Eighty-six percent of 372 reporting S&P 500 firms beat Q2 estimates, with index up 0.46% to a new all-time high.
Booking and Amgen lead gains; rate-hike odds sit at 58% for September.$BKNG #Earnings #SP500 pic.twitter.com/B7O9FE3jww
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Chipmakers also extended their recovery from a brutal July sell-off. Micron Technology gained more than 7%, while Marvell Technology surged nearly 13%.
Industrial giant Caterpillar delivered another major boost to the Dow, climbing more than 5% after beating second-quarter expectations and raising its revenue growth outlook.
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The company cited strong demand tied to the nationwide expansion of AI data centers. Caterpillar also said its full-year tariff costs were likely to land at the lower end of its previous forecast.
Financial stocks advanced 0.9%, with Goldman Sachs gaining more than 2%. Industrial and materials shares each rose nearly 2%.
The rally came amid a powerful earnings season for American companies. More than 84% of S&P 500 businesses that have reported quarterly results have beaten expectations, according to FactSet.
“From watching the stock market zoom higher over the past three sessions, you wouldn’t think there’s anything wrong with the world,” said Thierry Wizman, global FX & rates strategist at Macquarie Group. “After all, even the semiconductor makers have recovered from their big skid in July after some [artificial intelligence] hyperscalers managed to quell analysts’ fears about whether their data center investments are excessively eating into cash-flow. And so far, U.S. quarterly earnings reports haven’t disappointed, in aggregate.”
Tuesday’s surge followed another record-setting session Monday, when the Dow closed at an all-time high and Amazon briefly crossed $3 trillion in market value.
Amazon shares slipped 2% Tuesday after founder Jeff Bezos filed plans to sell approximately $4 billion worth of stock, but the pullback did little to slow a market rally powered by strong profits, cheaper oil and renewed hopes that the Trump administration could help defuse tensions with Iran.
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