The S&P 500 and Dow Jones Industrial Average reached record intraday levels on Tuesday. Strong forecasts from AI-linked companies supported buying across technology and industrial shares.

Markets also gained as investors tracked talks aimed at easing tensions between the United States and Iran. Oil prices fell after officials signaled progress toward reopening the Strait of Hormuz.

Major Wall Street Indexes Reach New Highs 

The S&P 500 gained 0.58% to reach 7,644.56 during early trading. The move marked its first intraday record since June. Meanwhile, the Dow rose 647 points, or 1.22%, to 53,825.50. The index also reached a new all-time high during the session.

The NASDAQ Composite added 1.16% and traded at 26,213.57. Technology and semiconductor stocks provided much of the support. Wall Street has recovered from the losses recorded during July. Concerns about high technology valuations had pressured several AI-related companies during that period.

However, strong earnings from large technology companies helped restore demand for growth stocks. Amazon and Microsoft reported results that supported confidence in AI spending.

The semiconductor sector also advanced during Tuesday’s session. The Philadelphia Semiconductor Index gained about 4% as chip stocks recovered from recent weakness.

Palantir and Caterpillar Lead the Rally

Palantir Technologies shares gained 17.4% after raising its annual revenue forecast. The software company reported stronger demand linked to artificial intelligence services. Its results added to investor interest in companies that provide AI software and data services. Palantir has benefited from government and commercial demand.

Chief Executive Alex Karp described the company’s quarterly performance as “otherworldly.” He also linked its growth to demand for sovereign AI systems. Caterpillar shares rose 12% after the industrial equipment maker reported higher second-quarter profit. 

The company also increased its annual revenue growth forecast. Demand from AI data center projects supported Caterpillar’s power-generation business. These facilities require equipment for electricity supply, construction and cooling systems. Caterpillar also expects its full-year tariff costs near the lower end of its earlier estimate. That forecast provided added support for its shares.

Middle East Deal Hopes Push Oil Lower

Oil prices fell as officials discussed a possible agreement involving the United States and Iran. The talks focus on reopening the Strait of Hormuz. US Treasury Secretary Scott Bessent said, “We are in talks with the Iranians,” Bessent said. He added that there was “a chance” of an agreement within two days. 

“There is a chance we may have a deal today or tomorrow," Bessent said. He added that the talks could restore commercial movement. A Qatari official also said diplomatic efforts had reached progressive stages. Qatar has taken part in negotiations aimed at reducing regional tensions.

West Texas Intermediate crude fell about 4% and traded near $76 per barrel. Brent crude also dropped about 4% to around $80. Lower oil prices reduced concerns about higher transport and production costs. They also eased pressure on companies that depend heavily on fuel.

However, the S&P 500 energy sector fell 2.5% as crude prices declined. Seven of the index’s 11 sectors traded lower during early trading.

Earnings Season Supports the Stock Market Rally

Corporate earnings have exceeded market forecasts across several sectors. Of 304 S&P 500 companies reporting by Friday, 85.2% beat analyst estimates. That rate stands above the long-term average of 67.5%. Strong results have supported stocks despite concerns about inflation, geopolitical risks and high valuations.

Investors are closely reviewing whether spending on artificial intelligence can produce steady revenue. Technology groups have committed billions of dollars to data centres and computing systems.

Eric Parnell, Chief Market Strategist at Great Valley Advisor Group, said AI earnings had performed well. However, he questioned whether that growth could last. “The big question that investors are asking themselves now is if it is going to be sustainable,” Parnell said. Coherent gained 14%, while Lumentum rose 7.8%. The gains followed reports about possible US limits on Chinese data center components. 

McDonald’s added 1.2% despite reporting weaker results. Pfizer fell about 1% after releasing its quarterly financial figures. Investors also reviewed labor market data later in the session. US job openings fell to 7.36 million in June, below market forecasts. 

Advancing shares outnumbered declining stocks on both major exchanges. The NYSE recorded a ratio of 1.36 to one. The NASDAQ posted stronger market breadth, with advancing shares beating decliners by 2.04 to one. Investors also awaited SpaceX’s first earnings report since its public listing.

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