US stocks continued to climb in late trading on Tuesday, with the Dow Jones Industrial Average and the S&P 500 both reaching new intraday highs, as the Dow surged 1,000 points. The gains were fueled by strong quarterly results from Caterpillar and Palantir, while a potential US-Iran peace deal contributed to a drop in oil prices.
The Dow rose 999.22 points, or 1.88%, to 54,177.63, the Nasdaq added 699.16 points, or 2.70%, to 26,613.06, and the S&P 500 gained 144.31 points, or 1.90%, to 7,744.81. Oil prices fell sharply on Tuesday, with the October Brent crude contract sliding 4% to $80.75 a barrel after trading above $86 earlier, and the September West Texas Intermediate crude contract dropping 4% to $76.90 from a high of $82.33.
US Treasury Secretary Scott Bessent said in an interview, "We are negotiating with the Iranians," and added, "It is possible that today or tomorrow, we will have an agreement to open the strait and move toward a more normalized situation." Additionally, a Qatari official mentioned a potential short-term deal between the US and Iran, which also drove international oil prices lower. A Qatari Foreign Ministry spokesperson stated that negotiations between the US and Iran are "ongoing," focusing on de-escalation and reopening the Strait of Hormuz, though no direct talks are currently taking place.
Major indexes all rose in Monday's trading, with the Dow closing at a record high and Amazon's market value surpassing $3 trillion for the first time. Nvidia shares also surged alongside Meta Platforms, while Alphabet and Microsoft posted strong gains. With Monday's rally, the S&P 500 is now just 0.27% away from a new intraday all-time high. Caterpillar reported better-than-expected second-quarter results and raised its revenue growth guidance, citing strong demand. Palantir also posted strong second-quarter results, and other tech stocks followed suit, with Micron Technology rising 4% and Marvell Technology gaining 8%.
Jose Torres, senior economist at Interactive Brokers, said, "Market sentiment is high at the start of the month," noting that the latest manufacturing and services data from Monday, along with recent earnings calls, have boosted confidence that the outlook for capital returns may be impressive after a deep sell-off in tech stocks led to a significant valuation decline.
On the economic data front, the US trade deficit narrowed in June as imports fell for the first time since early this year, with broad declines. The Commerce Department reported that the goods and services trade deficit narrowed 5.6% to $73.3 billion, with imports down 1.8% and exports down 0.9%. The data marks the end of the second quarter and suggests net exports continue to drag on US economic growth. US trade data has been volatile in recent months due to fluctuating tariff policies, disruptions from the Middle East conflict, and the AI investment boom. Despite the Supreme Court overturning several import tariff measures in the first quarter, the Trump administration continues to seek other ways to impose tariffs on imported goods. Driven by heavy corporate investment in AI, US imports of computers, peripherals, and components surged in 2025 and early this year, but the latest trade report shows a slowdown in computer and semiconductor import momentum in June. Capital goods imports, including these products, fell for the first time since September. After adjusting for inflation, the US goods trade deficit narrowed to $94.5 billion in June.
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