S&P 500 Hits Record High as Dow Clears 54,000

The S&P 500 closed at a record high on Tuesday, as investors welcomed strong corporate results and a rebound in technology stocks, while focusing on hopes for progress on reopening the Strait of Hormuz.

The index climbed 1.79% to 7,737 points, its first closing peak in two months and above the prior record set in early June. The Dow Jones Industrial Average gained more than 900 points, or 1.71%, to finish above 54,000 for the first time, extending a run of consecutive all-time highs after it reached a record on Monday for the first time in a month.

The Nasdaq Composite rose 2.59%. It remains about 2% below its record level from early June, after recovering from a summer slump.

Earnings Lift Stocks and Tech Rebounds

The move comes as Wall Street digests the latest round of quarterly earnings and reassesses how artificial intelligence is affecting different parts of the market. Despite earlier nerves about AI this summer, investors have rotated across sectors and bought into weakness in selected large technology and software names.

Tuesday marked the S&P 500’s best session since April, while the Dow recorded its strongest day in almost two months. The Nasdaq’s surge was its best day since last week.

By late Tuesday, the focus also included developments in the Middle East after US Treasury Secretary Scott Bessent told CNBC that he expects a deal to open the Strait of Hormuz could be reached “today or tomorrow”.

Oil prices fell sharply after the comments. Brent crude, the global benchmark, dropped about 5.3% to settle at $79.36 a barrel, its lowest close since July 10.

Strait of Hormuz Hopes Ease Oil and Inflation Fears

Traders leaned on Bessent’s remarks, though they continued to monitor how Washington and Tehran respond. Qatar’s Foreign Ministry said efforts to resolve the conflict were in “very progressive stages”.

Market participants have also been watching shipping activity in and out of the Strait of Hormuz as a gauge of whether oil flows are returning. With oil lower, concerns about inflation appeared to ease, and US Treasury yields pulled back after rising sharply last week.

Investors are also factoring in the start of Kevin Warsh’s tenure as Federal Reserve chair, alongside expectations that stubborn inflation could keep rates steady or lead to additional hikes in coming months.

From Two-Month Swoons to Record Levels

The S&P 500’s return to record levels ended a two-month period of weakness, during which the index fell by almost 5% from its early-June peak before moving sideways and then rebounding. The Nasdaq had fallen by nearly 10% from its late-July high, edging towards a technical correction as semiconductor stocks dropped and investors became selective about parts of technology.

Since a low on July 29, the Nasdaq has rallied nearly 9%, aided by a rebound in tech and AI-related stocks.

Within the Dow, Caterpillar rose 5.6% after reporting earnings and raising its forecast for annual revenue growth, citing increased demand linked to AI data-centre buildouts that support construction and power equipment.

In year-to-date terms, the Dow is up 12.5%, the S&P 500 has gained 13% and the Nasdaq is up more than 14%.

Earnings Season Deepens Focus on AI Demand

Earnings season continues to drive sentiment. FactSet data to July 31 showed about 61% of S&P 500 companies had reported, with 86% of those beating earnings-per-share expectations.

FactSet also said companies’ earnings growth is tracking towards the strongest pace in five years based on a blended measure combining results and estimates.

Palantir jumped 29% on Tuesday, its second-biggest day on record, after reporting a surge in revenue tied to demand for AI tools.

Investors also analysed SpaceX’s first quarterly results since becoming a public company. SpaceX shares gained 9% to $125, still below the company’s IPO target price of $135.

Bank of America has warned that August to October is historically the weakest three-month period for the S&P 500, leaving investors alert to potential risks. Craig Johnson, chief market technician at Piper Sandler, said in a note that falling oil and lower yields support a “risk-on” narrative near all-time highs, but that headline risks and weaker market breadth suggest the recovery is “good, not great”.

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5 August 2026