U.S. equities opened sharply higher Tuesday morning, with the Dow and S&P 500 pushing into record territory as blowout earnings from two very different corners of the American economy — AI software and heavy machinery — collided with fresh signals that the Strait of Hormuz could reopen within days.

As of 10:15 a.m. Eastern, the Dow Jones Industrial Average was up 659.82 points, or 1.24%, at 53,838.23, building on Monday’s record close. The Nasdaq Composite led the majors, adding 407.29 points, or 1.57%, to 26,321.19. The S&P 500 was up 0.97%, on pace for a record close of its own, while the Russell 2000 gained 0.64% to 3,001.02.

The rally extends Monday’s advance, when the Dow settled at an all-time high of 53,178.41 after gaining 693.38 points, the S&P 500 closed at 7,600.50 and the Nasdaq finished 2.1% higher at 25,913.9. Monday’s move marked a sharp reversal from July’s technology-led selloff as investors regained confidence that heavy artificial intelligence spending is still generating returns.

The catalyst on the geopolitical side came before the bell. Treasury Secretary Scott Bessent told CNBC that the United States is in talks with Iran and that an agreement to open the Strait and move toward a more normalized position in the conflict could come Tuesday or Wednesday. Crude reversed hard on the remarks, and the equity market read the same headline as a discount on input costs across transport, chemicals, packaging and retail.

Market Movers

Palantir (PLTR) — Shares ripped more than 23% in early trading after second-quarter results powered by a nearly 150% surge in U.S. commercial revenue. Revenue came in at $1.94 billion against estimates of $1.80 billion, with adjusted earnings of 41 cents a share versus 35 cents expected, and the company raised full-year sales guidance above Street forecasts. Management now expects commercial revenue to grow 134% this year.

Caterpillar (CAT) — The industrial bellwether climbed 8% premarket after beating expectations across the board. Adjusted earnings hit $8.17 a share, up from $4.72 a year earlier and well above the $6.20 consensus, on sales and revenues that rose 24% to $20.5 billion — the first quarter in company history above $20 billion, according to CEO Joe Creed. AI-driven demand at its power-generation business was cited as a key driver.

McDonald’s (MCD) — Up roughly 1.9% on a mixed print: adjusted earnings of $3.38 a share topped the $3.32 consensus, while revenue of $7.1 billion came in just under the $7.13 billion expected.

Merck (MRK) — Gained more than 1% after posting an adjusted loss of 13 cents a share on revenue of $16.61 billion, against expectations for a 27-cent loss on $16.36 billion, and raising full-year revenue guidance.

Pfizer (PFE) — Advanced after earning an adjusted 77 cents a share on $15.03 billion in revenue, beating the 68 cents and $14.41 billion expected, and lifting the low end of its full-year outlook.

On Semiconductor (ON) — Surged 7% on 74 cents a share, ex-items, on $1.6 billion in revenue, ahead of the 71 cents and $1.59 billion expected, with better-than-anticipated margins.

Snap (SNAP) — Rose 5% following its quarterly report.

SpaceX (SPCX) — Up 2.97% ahead of the company’s first quarterly earnings report as a public company, due after the close.

Commodities

Brent traded 3% lower at $81.24 a barrel and West Texas Intermediate lost nearly 4% to $77.22, with both contracts having been higher earlier in the session before Bessent’s comments. Crude had climbed toward $81.80 earlier Tuesday, recovering part of Monday’s sharp losses, as Iran denied that direct talks with Washington are underway while saying discussions with Oman on increasing shipping through the Strait are progressing. WTI settled around $80 on Monday after losing about 5%.

Supply-side news added to the pressure: Turkey and Iraq extended a key oil pipeline agreement by another year, Kazakhstan resumed crude flows through the Caspian Pipeline Consortium after a brief disruption, and OPEC+ approved another modest production increase, completing the restoration of cuts introduced in 2023.

Gold rose 1.34% to $4,145.50 an ounce.

Rates

Treasury yields followed oil lower. The 10-year note yield fell more than four basis points to 4.635%, the two-year slipped more than six basis points to 4.194%, and the 30-year bond shed three basis points to 5.199%.

What’s Ahead

After the close, results arrive from SpaceX and Advanced Micro Devices, along with Arista Networks, Amgen, Gilead Sciences, Booking Holdings and Emerson Electric. Analysts are projecting second-quarter revenue of $11.28 billion and adjusted earnings of $1.61 a share from AMD.

The broader earnings picture has been the quiet support underneath the move. Bank of America Securities puts the second-quarter beat rate at its highest going back to 2021, with 77% of S&P 500 companies reporting above expectations.

The caution is that the market has traded this script before. Vital Knowledge founder Adam Crisafulli noted that investors are keeping their enthusiasm in check, with the view that the conflict likely has further to run before any resolution.

JBizNews Desk | Wall Street

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