US stocks near record highs as earnings shine and oil prices ease

Newyork,UPDATED: Aug 4, 2026 22:58 IST

US stocks rallied towards record highs on Tuesday as a fresh run of strong company earnings lifted investor sentiment and easing oil prices reduced some concerns around inflation. The S&P 500 rose 1.7% and was on track to move past the all-time high it had set a couple of months ago, while the Dow Jones Industrial Average gained 966 points, or 1.8%, to move above its own record set a day earlier. The Nasdaq composite was up 2.2% as of 12:55 pm Eastern time.

The gains came despite continued worries about high inflation, the war in Iran and the possibility of a bubble in stock prices driven by excitement around artificial-intelligence technology. Wall Street has nevertheless moved closer to fresh peaks largely because company profits have been rising sharply, a key support for stock prices over the long term.

Palantir Technologies was among the strongest gainers, jumping 29.3% after chief executive Alex Karp said the company’s overall revenue surged 93% in what he called an "otherworldly" quarter. The AI company also reported stronger spring profit than analysts had expected and raised its full-year 2026 revenue forecast.

Caterpillar rose 6.5% after the heavy equipment maker reported profit and revenue above analysts’ estimates. It marked the first time the company posted more than USD 20 billion in quarterly sales and revenue, with chief executive Joe Creed saying Caterpillar was seeing strong order rates and a growing backlog across its main businesses. The company is also benefiting from the AI boom through higher orders for turbines used to power data centres, among other uses.

McDonald’s added 0.9% after reporting spring profit that beat analysts’ expectations, even as customers faced pressure from costly petrol and concerns about the economy. The company joined a growing list of firms, including Amazon and Microsoft, that have reported better-than-expected results for the latest quarter. Before this week, companies in the S&P 500 were on track to post nearly 50% year-on-year growth in earnings per share for the spring quarter, according to FactSet. That would be the biggest such increase since the spring of 2021, when the economy was rebounding strongly after the COVID-19 pandemic. Phil Segner, co-portfolio manager at the Leuthold Group, said that with profits rising so much while stock prices are still roughly where they were two months ago, stocks do not look as expensive as they did earlier.

Another drop in oil prices also supported the market. Brent crude, the international benchmark, fell 4.9% to USD 79.64 a barrel as hope again overtook fear in the oil market. Through July, Brent had swung sharply between USD 72 and USD 102 because of uncertainty over when the war with Iran would allow oil tankers to freely leave the Persian Gulf and deliver crude worldwide. Analysts warned that more volatility could still lie ahead, but the latest decline in oil prices helped ease some of Wall Street’s inflation worries.

That in turn pushed bond yields lower, easing pressure on both the wider economy and asset prices. The yield on the 10-year Treasury fell to 4.63% from 4.70% on Monday and 4.75% at the end of last week. Even so, it remained well above the 3.97% level seen before the war with Iran. Higher yields make borrowing more expensive for everyone from homebuyers seeking a mortgage to large companies planning to build AI data centres.

Data from the US economy suggested it remained resilient even though inflation is still higher than policymakers would like. One report showed employers were advertising nearly 7.4 million job openings at the end of June, slightly lower than in May but close to economists’ expectations. Overseas, stock indexes rose modestly across much of Europe and Asia. South Korea’s Kospi was a notable mover, rising 1.6% after sharp swings in recent sessions because the market is heavily influenced by Samsung Electronics and SK Hynix, two companies caught up in the AI rally. The Kospi had fallen 5.1% and then surged 17.9% over the previous two days. On Wall Street, chip stocks also advanced, with Broadcom up 6.1%, Nvidia rising 1.9% and Micron Technology climbing 8%, making them some of the biggest contributors to the S&P 500’s gains.

In sum, strong corporate earnings, lower oil prices, falling bond yields and steady economic data combined to push US stocks closer to fresh records on Tuesday, even as investors kept watch on inflation, the war in Iran and volatility linked to the AI-driven market rally.

With PTI Inputs

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