S&P 500 hits record, Dow surges 700 points after Bessent says Hormuz deal is near: Live updates

Stocks experienced a significant surge on Tuesday, driven by robust quarterly earnings from leading companies like Palantir Technologies and Caterpillar, coupled with a drop in oil prices due to optimism surrounding a potential U.S.-Iran deal to reopen the Strait of Hormuz. The S&P 500 climbed 0.5%, while the Nasdaq Composite soared 0.9%, with Palantir surging more than 17%.

The Dow Jones Industrial Average experienced a massive 772-point increase, or 1.4%, propelled by a 12% rise in Caterpillar's stock. Treasury Secretary Scott Bessent stated in an CNBC interview that "we are in talks with the Iranians." He 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."

Oil prices dropped in response to Bessent's comments, with West Texas Intermediate futures falling 3% to around $77 per barrel and Brent crude declining 2% to roughly $81 a barrel. The major stock averages soared in Monday's session, with the Dow reaching a record high, following an unprecedented surge in Amazon's market capitalization to $3 trillion.

Nvidia shares also saw substantial gains, as did Meta Platforms. Alphabet and Microsoft also experienced notable price increases during the day. As of Monday's move, the S&P 500 was only 0.27% away from setting a new all-time intraday high. Palantir posted impressive results for the second quarter, with CEO Alex Karp describing the outcome as "otherworldly" due to the growing demand for artificial intelligence sovereignty.

Commercial revenue jumped 149% to $764 million. Karp expressed optimism about the "sovereign AI revolution" making a significant impact on the future. Caterpillar also reported better-than-expected Q2 numbers and raised its revenue growth guidance, citing strong demand for its equipment. Other tech names followed Palantir's lead, with Micron Technology up 4% and Marvell Technology advancing 8%.

Economists describe the current market sentiment as "animal spirits being buoyant" as the month begins. Investors are closely monitoring SpaceX, which is set to report its first quarterly earnings as a publicly traded company, and the stock saw a 1% increase ahead of the market open.