On Tuesday, expectations that the United States and Iran might reach an agreement to reopen the Strait of Hormuz propelled stocks to record highs. The three major indexes closed significantly higher, with the S&P 500 marking its first new all-time high since June.
Regarding US Markets: At the closing bell, the S&P 500 advanced 1.79% to 7,736.52 points, achieving its first new high since June. The Nasdaq Composite Index climbed 2.59% to 26,584.99 points. The Dow Jones Industrial Average surged 907.47 points, or 1.71%, to 54,085.88 points. Both the S&P 500 and the Dow closed at record highs. The Philadelphia Semiconductor Index soared 6.55%. SK Hynix (SKHY.US) jumped 8%, Micron Technology (MU.US) rose 7.6%, SanDisk (SNDK.US) rallied 10.8%, NVIDIA (NVDA.US) added over 2%, and SpaceX (SPCX.US) gained 9.4%. The Nasdaq Golden Dragon China Index dipped 0.35%, while Alibaba (BABA.US) edged up 1%.
In European Markets, Germany's DAX 30 climbed 386.44 points, or 1.51%, to 26,017.22. The UK's FTSE 100 slipped 13.15 points, or 0.12%, to 10,854.90. France's CAC 40 advanced 104.18 points, or 1.22%, to 8,613.82. The Euro Stoxx 50 rose 72.34 points, or 1.14%, to 6,430.35. Spain's IBEX 35 gained 186.21 points, or 0.94%, to 19,969.11. Italy's FTSE MIB increased 684.47 points, or 1.31%, to 52,857.00.
For Asian Markets, Japan's Nikkei 225 rose 0.32%, and South Korea's Kospi index added 1.62%.
The US Dollar Index, which measures the greenback against six major currencies, fell 0.04% on the day to close at 99.858 in late New York trading. At the close of New York forex trading, the euro was at $1.1533, up from $1.1514 in the previous session. The British pound traded at $1.3452, up from $1.3431. The dollar was at 157.66 Japanese yen, up from 156.74. The dollar was at 0.8092 Swiss franc, down from 0.8101. The dollar was at 1.4066 Canadian dollars, up from 1.4045. The dollar was at 9.5192 Swedish krona, down from 9.5557.
In the Cryptocurrency space, Bitcoin broke through the $64,000 mark. Ethereum showed little movement, trading at $1,870.19.
For Crude Oil, West Texas Intermediate for September delivery fell 5.7% to settle at $75.77 per barrel. Brent crude for October delivery dropped 5.3% to settle at $79.36 per barrel. US Treasury Secretary Scott Bessent stated on Tuesday that an agreement to reopen the Strait of Hormuz could be reached within the day or the next.
In Precious Metals, spot gold was trading at $4,077.91 per ounce, while spot silver was at $59.541 per ounce.
On the Macro Front, US job openings saw a slight decline in June, indicating that labor demand remained relatively stable as summer began. Data released on Tuesday showed June's JOLTs job openings fell to 7.36 million from a revised 7.54 million in May. The median market expectation was for approximately 7.4 million openings. The decrease was primarily driven by reductions in healthcare, leisure and hospitality, wholesale trade, and business services, while layoffs remained largely unchanged. The report confirmed a picture of a stable labor market with limited layoffs. Although some employers remain cautious about hiring, resilient consumer spending continues to support their hiring plans. Hiring activity accelerated, led by the healthcare and construction sectors. Hiring in the leisure and hospitality sector fell for the third consecutive month to its lowest level since early 2025, contradicting earlier expectations that the World Cup would stimulate labor demand.
According to reports, the White House does not plan to publicly release the details of its new framework for evaluating advanced AI models, with specifics only being shared with companies involved in the process. Companies not participating in the process, policymakers, researchers, and US allies will be unable to understand how the government plans to implement one of its key AI policies. The White House held staff-level meetings with industry representatives on Tuesday to discuss the recently completed framework. Companies not invited to the meetings remain unaware of the framework's content, and it is unclear which "trusted partners" will gain early access to advanced models under the framework, including whether any foreign governments qualify. Sources indicated that open-source models were discussed, but no further details were provided. It was also mentioned that employees from NVIDIA (NVDA.O) participated in the relevant meetings.
Known as the "Fed's mouthpiece," Nick Timiraos reported that Treasury Secretary Bessent's policy reaction function has shifted, becoming less dovish. His comments this year suggest the Federal Reserve should keep interest rates unchanged. Earlier this year, Bessent cited models indicating that the Fed's rate could be between 25 and over 100 basis points above the neutral rate. On Tuesday, he made two points. First, he defended Fed Governor nominee Kevin Warsh's decision not to articulate a specific policy reaction function last week, stating that every meeting should be open, and market participants should judge for themselves. Bessent noted that Warsh wants to preserve optionality to achieve the best outcome. Second, he proposed a reaction function that could be seen as dovish, arguing that short-term shocks should be ignored. He posed the question of what impact rising short-term rates would actually have, but then responded by pointing out that core inflation is "very benign... very stable." He stated, "Excluding volatile components heavily impacted by energy, the rest of core inflation has been very stable. I think this situation will persist."
Wells Fargo strategist Ohsung Kwon is bullish on the industrial sector, citing the benefits from increasing data center construction. He suggests that capital goods companies producing machinery, equipment, and tools for data centers are some of the "closest to the AI theme." According to Wells Fargo estimates, manufacturing activity expanded at its fastest pace in over four years in July, while non-AI-related capital expenditures grew 10% year-over-year. Additionally, growth in commercial and industrial loans has accelerated. In recent months, traders have favored "traditional economy" sectors, pushing industrial stocks up 20% this year, trailing only the energy and information technology sectors. Kwon estimates there are currently about 40 new hyperscale data centers under construction, with over 100 more in the planning stages, primarily in Texas, Georgia, Virginia, and Pennsylvania. "If the economic benefits from regions with operational data centers become a new trend, we are in the very, very early stages of this spillover effect," he said.
A survey indicated that OPEC's crude oil production further recovered in July, with growth driven almost entirely by three major Persian Gulf nations. OPEC members increased supply by 1.16 million barrels per day (bpd) in July to an average of 19.44 million bpd, nearly all of which came from Kuwait, Saudi Arabia, and Iraq. The group's output remains significantly below pre-conflict levels. Iraq led the production increase among OPEC members in July, adding 460,000 bpd to reach 2.3 million bpd. Tanker tracking data showed Iraq's crude oil loadings rose 37% in July. Kuwait's daily output increased by 360,000 bpd in July to 1.57 million bpd. Kuwaiti officials stated the country has returned to its highest average production levels since the start of the conflict. Saudi Arabia's situation was more complex. According to the survey, Saudi output rose by 390,000 bpd to 7.4 million bpd, but its production remains millions of barrels below pre-conflict levels. Meanwhile, export flows have decreased as Houthi rebels threaten tankers using alternative Red Sea routes preferred by Saudi Arabia.
The US trade deficit narrowed in June as imports fell for the first time since the start of the year, with the decline spanning multiple sectors. The Commerce Department reported on Tuesday that the deficit in goods and services shrank by 5.6% from the previous month to $73.3 billion. Imports dropped 1.8%, while exports fell 0.9%. The trade data suggests net exports continue to be a drag on economic growth this quarter. US trade figures have been volatile in recent months due to changing tariff policies, supply chain disruptions from the Middle East conflict, and significant corporate investment in artificial intelligence. Although the Supreme Court struck down many import tariffs imposed by the Trump administration in the first quarter, the government is still seeking other avenues to impose tariffs on imported goods. From 2025 through early this year, imports of computers, peripherals, and related components surged as companies aggressively pursued AI investments. However, the latest trade report showed a slowdown in computer and semiconductor imports in June. Imports of a broader category of capital goods, including related equipment, also declined for the first time since last September.
In Company News, Apple Inc. (AAPL.US) has begun preparations for its September product launch. The company is opening a lottery system for US retail employees interested in working at the on-site event. Internal memos indicate the lottery allows retail staff to apply for roles assisting with the event, such as organizing queues, registering visitors, greeting attendees, providing directions, and supporting the security team. Apple informed employees the launch event will occur in the first half of September but did not provide a specific date. Historically, Apple's iPhone launches have been on the second Tuesday or Wednesday of the month. Since the US Labor Day holiday falls on Monday, September 7th, a Wednesday launch is slightly more likely. This September's event will be the first major product launch under new CEO John Ternus, who will succeed Tim Cook on September 1st.
Novo Nordisk A/S (NVO.US) raised its financial guidance for the second time this year, driven by higher expectations for sales of its obesity and diabetes drugs. The company reported an adjusted operating profit of 33.389 billion Danish kroner for the second quarter of 2026 and revised its full-year outlook upwards. It now expects the maximum decline in sales and profit for the year to be 6%, compared to a previous forecast of a potential drop of up to 12% in constant currency. Novo Nordisk is competing with rival Eli Lilly (LLY.N) in the obesity market, which is projected to reach $120 billion annually by 2030.
In Analyst Ratings, Bank of America Global Research initiated coverage on SK Hynix (SKHY.US) with a "Buy" rating and a price target of $250.
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