Wall Street surged Tuesday with the S&P 500 climbing to an intraday record of 7,716.62, up 1.5% as investors rotated back into equities on two key catalysts. U.S. Treasury Secretary Scott Bessent's signal that an Iran agreement could materialize within days triggered a sharp drop in oil prices, while a fresh round of blockbuster earnings from major corporations confirmed that artificial intelligence investments are actually paying off.
The Dow Jones gained more than 900 points and Nasdaq advanced roughly 2%. Tech shares bounced back from earlier summer weakness as markets digested strong quarterly results from the usual suspects. Amazon and Microsoft had already shifted sentiment, but Tuesday brought fresh momentum from Caterpillar, which raised its annual revenue forecast citing stronger demand from AI infrastructure buildouts. Palantir reported 93% year-over-year revenue growth and lifted its full-year guidance, essentially telling the market that the trillion-dollar AI spending wave isn't some accounting mirage.
Oil moved harder than stocks. U.S. crude dropped below $76 per barrel after Bessent indicated Tehran could sign off on reopening the Strait of Hormuz, the chokepoint through which roughly a third of seaborne traded oil flows. Bloomberg reported Iran is even considering allowing European countries to clear mines from the strait, suggesting both sides are moving toward an actual deal rather than just talking about one.
Analyst consensus on the S&P 500 tilts decidedly bullish. Out of 503 stocks covered, 420 analysts maintain buy ratings while 73 recommend hold and just 10have sell signals. The setup points higher from here, though Tuesday's 1.5% pop already priced in the good news.
