US stocks hit record highs as Hormuz talks boost optimism

U.S. stock markets surged to record highs on Tuesday, August 4, 2026, propelled by a combination of strong corporate earnings and diplomatic optimism over a potential deal to reopen the Strait of Hormuz. The S&P 500 closed at 7,736.52, its first record since early July, while the Dow Jones Industrial Average rose 907 points to finish at 54,085.88. The technology-heavy Nasdaq Composite outperformed both, gaining 2.59%.

The rally was broad-based, extending beyond the technology sector to include materials, industrials, and financials. Corporate earnings provided a fundamental catalyst, with second-quarter S&P 500 earnings growth tracking at 24.7%. Companies like Palantir Technologies reported significant revenue growth, while Caterpillar posted strong results and raised its sales outlook, easing concerns about demand.

A major driver of market sentiment was progress in diplomatic talks aimed at ensuring safer and increased vessel traffic through the Strait of Hormuz, a critical waterway for global oil shipments. Secretary of State Marco Rubio confirmed the strait remains open and described advancing negotiations involving Iran, Oman, and U.S. participation. Treasury Secretary Scott...