S&P 500, Dow Set Records on AI Earnings, Iran Hopes
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- Palantir (PLTR.O) soared 29.5% — its biggest single-day gain since February 2024 — after raising its annual revenue forecast on strong US government and commercial demand.
- Caterpillar (CAT.N) jumped 5.6% and accounted for roughly 280 points of the Dow's gain after raising its annual revenue growth forecast, citing AI data-center buildout fueling demand for power-generation and construction equipment.
- Crude prices dropped about 5% after a Qatari official said diplomatic efforts on the Iran conflict were continuing, with Treasury Secretary Scott Bessent saying a deal to reopen the Strait of Hormuz could come within two days.
- The S&P 500 gained 1.79% to 7,736.52 and the Dow rose 1.71% to 54,085.88 — both closing records — while the Nasdaq added 2.59% to 26,584.99.
- The Philadelphia Semiconductor index (.SOX) surged 6.6%, its fourth straight session of gains after tumbling 20.6% in July.
- The probability of a Federal Reserve rate hike at its September meeting fell to 56.9% from 67.2% per CME FedWatch, as the oil-price tumble pulled Treasury yields lower.
- SpaceX (SPCX.O) rose 9.4% into its first quarterly report since going public, then dropped about 4% in after-hours trading following the release.
- Jack Ablin of Cresset Capital told Reuters he sensed "not one ounce of skepticism" among investors, questioning whether earnings alone justified new S&P records.
Why it matters: Investors are rewarding AI names with concrete demand evidence — Palantir's 29.5% surge and chips' 6.6% rebound — while simultaneously pricing in a two-day timeline from Bessent for an Iran deal that cut oil 5% and trimmed September rate-hike odds by 10 percentage points, giving the market a rare two-sided tailwind of easing geopolitical and monetary risk.
