US stocks rally, Dow closes at record on Iran talks optimism
The Dow Jones Industrial Average rose 1.32 per cent, while the S&P 500 and Nasdaq gained 1.48 per cent and 2.13 per cent, respectively.
In a strong start to August, US stocks propelled the Dow Industrials to a record high as growing optimism about de-escalating US-Iran tensions drove oil prices down and Treasury yields lower. Crude oil prices fell about 5% following President Trump's announcement on August 2 that talks to reopen the Strait of Hormuz would occur on August 3, though Iran denied any such plans.
This drop in oil prices helped push down US Treasury yields, even as market participants monitored the odds of a Federal Reserve rate hike amid concerns about the ongoing Iran war. Communication services led the 11 major S&P sectors, climbing 4.3% thanks to gains from Meta Platforms and Alphabet. Energy experienced the worst performance, falling 1.2%.
"Every day, everybody wakes up and looks at the price of a barrel of oil and the yield on the 10-year, and if that’s going lower, the market’s OK, and if it’s going higher, the market’s not good whatsoever," explained Art Hogan, B. Riley Wealth's chief market strategist. Despite strong earnings this quarter, with a 29.3% growth rate from the 304 companies in the S&P 500 that have reported through July 31, the market's performance has not been solely driven by earnings.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
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