S&P 500, Dow Hit Records on AI Earnings, Iran Deal Hopes
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- Palantir soared 29.5% — its biggest daily percentage gain since February 2024 — after raising its annual revenue forecast on strong US government and commercial demand.
- Caterpillar jumped 5.6% after raising its annual revenue growth forecast as AI data center buildouts fueled demand for its power-generation and construction equipment, accounting for about 280 points of the Dow's upside.
- The S&P 500 closed at 7,736.52 (+1.79%), the Dow at 54,085.88 (+1.71%, +907.47 points) and the Nasdaq at 26,584.99 (+2.59%), with the Philadelphia Semiconductor index surging 6.6% for a fourth straight session gain after a 20.6% July tumble.
- Crude prices dropped about 5% after a Qatari official said diplomatic efforts on the Iran conflict were continuing, and Treasury Secretary Scott Bessent said a deal to reopen the Strait of Hormuz could come within two days.
- Expectations for a Federal Reserve rate hike at the September meeting dropped to 56.9% from 67.2% per CME FedWatch as the oil decline pulled Treasury yields lower.
- SpaceX shares closed up 9.4% ahead of its first quarterly results since going public, then dropped about 4% in after-hours trading post-report.
- Of the 304 S&P 500 companies that have reported Q2 earnings, 85.2% beat estimates — well above the long-term average of 67.5%, per LSEG data.
Why it matters: Palantir's 29.5% surge shows investors are still rewarding AI-exposed companies that raise guidance, but the breadth of the rally is striking: every S&P 500 sector showed profit growth, with 85.2% of reporters beating estimates against a 67.5% historical average. Cresset CIO Jack Ablin told Reuters he sees 'not one ounce of skepticism' from oil to rates to equities, and questioned whether a handful of earnings reports justifies new S&P records.
