U.S. stock markets continued their upward momentum during Tuesday midday trading, with the Dow Jones Industrial Average and the S&P 500 both setting new intraday records. The Dow Jones surpassed the 54,000-point milestone for the first time in history.
Strong quarterly earnings from companies such as Caterpillar and Palantir provided a boost to the indices. Additionally, hopes for a potential peace agreement between the U.S. and Iran contributed to a decline in oil prices. The Dow Jones rose 871.92 points, or 1.64%, to 54,050.33 points; the Nasdaq Composite gained 533.58 points, or 2.06%, reaching 26,447.48 points; and the S&P 500 advanced 109.44 points, or 1.44%, to 7,709.94 points.
Oil prices fell sharply on Tuesday. The October Brent crude contract (BRN00) (BRNV26), which had previously traded above $86 per barrel, dropped 4% to $80.75 per barrel. The September West Texas Intermediate crude contract (CL.1) (CLU26), which had risen to $82.33 per barrel, also fell 4% to $76.90 per barrel.
Where to focus first
U.S. Treasury Secretary Scott Bessent stated in an interview, "We are in negotiations with Iran." He added, "It is possible that we reach an agreement today or tomorrow to open the strait and move toward a more normalized situation in this conflict." Additionally, a Qatari official's mention of a potential short-term agreement between the U.S. and Iran led to a significant decline in international oil prices. Reports indicate that a spokesperson for Qatar's Foreign Ministry said negotiations between the U.S. and Iran are "ongoing," with a focus on de-escalation and reopening the Strait of Hormuz. However, the spokesperson noted that there are no direct talks between the two sides at this time.
Major indices posted broad gains during Monday trading, with the Dow closing at a record high. Amazon's market capitalization surpassed $3 trillion for the first time. Nvidia shares also surged significantly, alongside Meta Platforms. Google parent company Alphabet and Microsoft posted substantial gains on Monday as well. With Monday's rise, the S&P 500 is now just 0.27% away from surpassing its previous intraday record high.
Caterpillar reported second-quarter earnings that exceeded expectations and raised its revenue growth guidance, citing strong demand. Palantir also posted robust second-quarter results. Other tech stocks followed Palantir's upward trend. Micron Technology rose 4%, while Marvell Technology gained 8%.
Interactive Brokers Senior Economist Jose Torres commented, "Market sentiment was high at the start of the month." He noted that the latest manufacturing and services data from Monday, along with "recent earnings conference calls, have reinforced confidence that the outlook for capital returns could be impressive after the sharp decline in tech stocks had significantly lowered valuations."
On the economic data front, the U.S. trade deficit narrowed in June, driven by the first decline in imports since the beginning of the year, with a broad-based slowdown. Data released by the U.S. Commerce Department on Tuesday showed the deficit in goods and services trade narrowed by 5.6% from the previous month to $73.3 billion. Imports fell 1.8%, while exports dropped 0.9%. This trade data marks the end of the second quarter and indicates that net exports continued to drag on U.S. economic growth.
Reasons for the market's narrow focus on just 10 ASX 200 shares?
U.S. trade data has been volatile in recent months, influenced by fluctuating tariff policies, disruptions to trade from the Middle East conflict, and the AI investment boom. Although the Supreme Court overturned several import tariff measures in the first quarter, the Trump administration is still seeking alternative ways to impose tariffs on imported goods.
Driven by significant corporate investment in artificial intelligence, U.S. imports of computers, computer peripherals, and components saw strong growth in 2025 and early this year. However, the latest trade report shows that the momentum in imports of computers and semiconductors slowed in June. Imports of capital goods, which include these products, fell for the first time since September. After adjusting for inflation, the U.S. goods trade deficit narrowed to $94.5 billion in June.
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