The stock market soars. 5 reasons behind the big surge Tuesday
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- Scott Bessent told CNBC's "Squawk Box" that the U.S. and Iran could reach a deal Tuesday or Wednesday to reopen the Strait of Hormuz, sending Dow futures soaring and oil futures tumbling.
- S&P 500 Q2 earnings are on track for 27% year-over-year growth excluding Alphabet and Amazon — a 4% beat versus consensus — with the broader index pacing 45% YoY growth including them, per Bank of America Securities.
- Semiconductor and software ETFs jumped in tandem on AI optimism, with SOXX gaining 6% and IGV adding nearly 5%, lifting the Nasdaq Composite more than 2.5%; the Nasdaq 100 surged over 3% after dropping into a shallow correction last week.
- S&P 500 broke through resistance at 7,620 and closed above 7,700 for the first time ever; strategist Jeff Krumpelman of Mariner is targeting 8,100 by year-end and 8,400 by mid-2027.
- Leopold Aschenbrenner's Situational Awareness fund, which peaked near $45 billion in July, forced Aschenbrenner to sell leveraged stock bets to Citadel last week — clearing out overheated momentum names and creating what one strategist dubbed the "Leopold low."
- Magnificent Seven stocks lagged despite the broad rally: the Roundhill MAGS ETF is up only ~5% year-to-date in 2026 versus the S&P 500's 13% advance, underscoring the group's recent underperformance.
Why it matters: Tuesday's rally pushed the S&P 500 above 7,700 for the first time and erased last week's Nasdaq correction, but the same Iran headlines that fueled the surge remain the market's biggest swing factor — strategist Larry Tentarelli warned investors should expect volatility in either direction if tensions flare again. Earnings beats aren't actually being rewarded this season: S&P 500 stocks have slipped an average 0.2% the day after reporting per Charles Schwab, meaning the rally is being driven more by macro relief and forced-position unwinds than by fundamental validation.
