U.S. stocks opened higher on Tuesday evening, Beijing time, with the Dow Jones Industrial Average and the S&P 500 both setting new intraday record highs. Strong quarterly results from companies like Caterpillar and Palantir helped lift the broader market, while a potential US-Iran peace agreement pushed oil prices lower.
The Dow rose 759.83 points, or 1.43%, to 53,938.24. The Nasdaq climbed 198.86 points, or 0.77%, to 26,112.75. The S&P 500 gained 37.19 points, or 0.49%, to 7,637.69.
Oil prices fell sharply on Tuesday. The October Brent crude contract (BRN00, BRNV26) traded above $86 per barrel before retreating 4% to $80.75. The September West Texas Intermediate crude contract (CL.1, CLU26) rose as high as $82.33 before dropping 4% to $76.90.
Where to begin
U.S. Treasury Secretary Scott Bessent said in an interview, "We are negotiating with the Iranian side." He added, "It is possible that we will reach an agreement today or tomorrow to open the Strait and move toward a more normalized situation in this conflict." Additionally, a Qatari official mentioned the possibility of a short-term agreement between the U.S. and Iran, which also contributed to the sharp drop in global oil prices. According to reports, a spokesperson for Qatar's Foreign Ministry stated that talks between the U.S. and Iran are "ongoing," focusing on de-escalation and reopening the Strait of Hormuz. However, the spokesperson noted that direct negotiations between the two parties are not currently taking place.
Major indexes rallied across the board in Monday's trading session, with the Dow closing at a record high and Amazon's market capitalization surpassing $3 trillion for the first time. Nvidia shares also surged alongside Meta Platforms. Alphabet, Google's parent company, and Microsoft also posted solid gains on Monday. Following Monday's rally, the S&P 500 now sits just 0.27% away from a fresh intraday all-time high.
Caterpillar reported better-than-expected second-quarter results and raised its revenue growth guidance, citing strong demand. Palantir also posted robust second-quarter earnings. Other tech stocks followed Palantir higher, with Micron Technology rising 4% and Marvell Technology jumping 8%.
Jose Torres, Senior Economist at Interactive Brokers, said, "Market sentiment is high at the start of the month." He noted that the latest manufacturing and services data released on Monday, along with "recent earnings calls, have reinforced confidence that the outlook for capital returns may be impressive after deep declines in tech stocks previously led to significant valuation drops."
Economic data
On the economic data front Tuesday, the U.S. trade deficit narrowed in June, driven by the first decline in imports since the start of the year and a broad-based slowdown. Data from the Commerce Department showed the goods and services trade deficit contracted by 5.6% month-over-month to $73.3 billion in June. Imports fell 1.8%, while exports declined 0.9%. This trade data marks the end of the second quarter and suggests that net exports continued to drag on U.S. economic growth.
U.S. trade data has been volatile in recent months due to repeated adjustments in tariff policies, disruptions to trade from the Middle East conflict, and the surge in artificial intelligence investment. Although the Supreme Court overturned several import tariff measures in the first quarter, the Trump administration continues to seek other avenues to impose tariffs on imported goods.
Driven by massive corporate investment in AI, U.S. imports of computers, computer peripherals, and components surged in 2025 and early this year. However, the latest trade report showed that momentum in computer and semiconductor imports 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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