The stock market soars. 5 reasons behind the big surge Tuesday — SkimNews
SkimNews Take
A simultaneous easing of geopolitical fears and strong earnings creates a rare "all-clear" setup, but markets are now positioned with thin margin if either thesis disappoints in the weeks ahead.
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- S&P 500 jumped nearly 2% to a new all-time high on Tuesday while the Dow Jones Industrial Average surged more than 900 points for its best day in nearly two months, marking one of the S&P 500's biggest single-day advances of the year.
- Treasury Secretary Scott Bessent told CNBC's "Squawk Box" the U.S. and Iran could reach a deal either Tuesday or Wednesday to reopen the Strait of Hormuz, sending Dow futures surging, oil futures tumbling, and bond yields falling.
- The S&P 500 is on track to deliver Q2 earnings growth of 27% year-over-year excluding Alphabet and Amazon, a 4% beat versus consensus per Bank of America Securities, with the broader index including those two companies on pace for 45% year-over-year growth.
- Technology stocks rallied across the board on Tuesday, with the iShares Semiconductor ETF (SOXX) jumping more than 6%, the iShares Expanded Tech-Software Sector ETF (IGV) adding nearly 5%, and the Nasdaq Composite rising more than 2.5% — a reversal from July when chip and software stocks had diverged.
- The S&P 500 opened above the closely watched 7,620 resistance level (June high) and closed above 7,700 for the first time ever, with Mariner's Jeff Krumpelman predicting the index could reach 8,100 by year-end and 8,400 by mid-2027.
- The forced sale of Leopold Aschenbrenner's Situational Awareness fund leveraged positions to Citadel last week cleared algorithmic selling pressure in momentum names — dubbed a "Leopold low" by KKM Financial's Jeff Kilburg — which had pushed the Nasdaq 100 into a shallow correction before Tuesday's rebound.
- After Tuesday's rally, the S&P 500 is up 3.3% for August and the Nasdaq Composite is up nearly 5% in just two days, while the Roundhill Magnificent Seven ETF (MAGS) has gained only around 5% in 2026 compared with the S&P 500's 13% advance, underscoring its underperformance.
Why it matters: The rally's breadth — semiconductors, software, and the Roundhill Magnificent Seven ETF all advancing alongside healthcare, industrials, and financials posting "strong double digit" earnings growth per Mariner's Krumpelman — marks a structural shift from the narrow megacap-driven market of recent years. With the S&P 500 closing above 7,700 for the first time ever after breaking the 7,620 resistance, and Bessent's Iran deal potentially landing within days, the setup creates a binary risk: resolution removes an oil-price overhang while any flare-up could send crude back toward the $150-per-barrel level that Krumpelman flagged as a headwind.
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