US stock markets surged, with the S&P 500 and Dow Jones Industrial Average hitting all-time highs. The S&P 500 climbed 1.79% to 7,737 points, marking its first record close in two months, while the Dow soared over 900 points, or 1.71%, closing above 54,000 points for the first time ever. The Nasdaq 100 also saw a substantial jump of 3.3%.
The market rally was largely fueled by optimism surrounding a potential agreement to reopen the Strait of Hormuz, which led to a significant drop in oil prices and eased inflation concerns. Treasury Secretary Scott Bessent's comments on a possible deal this week further boosted sentiment. Additionally, robust corporate earnings reports contributed to the gains. Analysts anticipate second-quarter earnings to increase by 23%, with AI spending accounting for nearly 60% of the S&P 500's earnings-per-share growth. So far, 86% of the 322 S&P 500 companies that have reported Q2 earnings have beaten estimates.
Several companies reported strong earnings, propelling their stock prices. Palantir Technologies Inc. rocketed over 29% after boosting its full-year revenue and income forecasts, citing "otherworldly" commercial demand for its data analytics tools. Caterpillar Inc. surged more than 5% after crushing second-quarter expectations and raising its sales outlook. Wayfair Inc. also saw a boost after reporting its fastest US sales growth since 2021, driven by brick-and-mortar expansion and demand for higher-end brands. Conversely, Advanced Micro Devices Inc.'s outlook failed to impress investors.
