NEW YORK – U.S. stocks climbed to new record highs on Tuesday as strong corporate earnings and lower oil prices boosted investor confidence, easing concerns about inflation and supporting another broad-based rally on Wall Street.
The S&P 500 rose 1.8% to a record close of 7,736.52, surpassing the all-time high it set two months ago. The Dow Jones Industrial Average gained 907.47 points, or 1.7%, to finish at a record 54,085.88, while the Nasdaq Composite jumped 2.6% to 26,584.99.
The gains extended Wall Street’s recent momentum as investors welcomed another round of upbeat earnings reports while monitoring inflation, geopolitical tensions and the outlook for artificial intelligence spending.
Strong Earnings Drive Market Higher
Corporate earnings remained the biggest driver of Tuesday’s rally.
Palantir Technologies led the advance, with shares soaring 29.5% after the artificial intelligence software company reported quarterly results that exceeded analysts’ expectations.
Chief Executive Officer Alex Karp said revenue rose 93% during what he described as an “otherworldly” quarter. The company also raised its full-year revenue forecast after posting stronger-than-expected profit.
Caterpillar also posted solid results, sending its shares up 5.6%.
The heavy equipment manufacturer reported record quarterly revenue of more than $20 billion, beating Wall Street estimates for both sales and earnings.
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Chief Executive Officer Joe Creed said customer demand remained strong, with the company continuing to build a healthy order backlog. Caterpillar also cited growing demand tied to artificial intelligence infrastructure, including equipment used to power large data centers.
The latest reports followed strong earnings from major technology companies including Amazon and Microsoft, reinforcing expectations for another robust earnings season.
According to FactSet, companies in the S&P 500 are on pace to deliver nearly 50% year-over-year earnings-per-share growth for the spring quarter. If achieved, it would mark the strongest quarterly earnings growth since 2021.
Phil Segner, co-portfolio manager at Leuthold Group, said improving corporate profits have helped justify higher stock prices despite record market levels.
Falling Oil Prices Ease Inflation Concerns
Lower oil prices also supported investor sentiment.
Brent crude, the global benchmark, fell 5.3% to $79.36 per barrel as concerns over Middle East supply disruptions eased.
Oil prices had swung sharply throughout July, trading between $72 and $102 per barrel amid uncertainty surrounding the conflict involving Iran and shipping through the Persian Gulf.
The latest decline reduced immediate concerns that higher energy costs could push inflation higher or slow economic growth.
Lower oil prices also helped pull Treasury yields lower, easing borrowing-cost pressures for consumers and businesses.
The yield on the benchmark 10-year U.S. Treasury note fell to 4.62%, down from 4.70% on Monday and 4.75% at the end of last week.
Although yields remain above levels seen before the Iran conflict intensified, the recent decline offers some relief for borrowers, including homebuyers and companies financing major investment projects.
Economic Data Points to a Resilient Economy
Fresh economic data also supported investor confidence.
Employers reported nearly 7.4 million job openings at the end of June, slightly below May’s total but generally matching economists’ expectations.
The figures suggest the labor market is cooling gradually while continuing to support broader economic growth.
AI Stocks Continue to Lead Gains
Artificial intelligence-related companies remained among the market’s strongest performers.
Nvidia gained 2.6%, Broadcom rose 6.6%, and Micron Technology advanced 7.6%, making some of the largest contributions to the S&P 500’s record-setting session.
Technology shares also helped lift overseas markets.
South Korea’s Kospi index rose 1.6%, extending recent volatility driven largely by semiconductor giants Samsung Electronics and SK Hynix.
Not every company joined the rally. Chipotle Mexican Grill fell 9.7% after investors expressed concern that a temporary removal of jalapeños from some restaurants during a salmonella outbreak could weigh on future earnings.
Chipotle said Minnesota health officials had no continuing concerns involving the company.
Tuesday’s gains reflected growing investor confidence in corporate earnings while lower oil prices helped reduce inflation worries. Markets remain focused on the outlook for artificial intelligence, interest rates and global economic growth.
This report is based on reporting by The Associated Press.
