Post-Market Recap — Tuesday, August 4, 2026

U.S. stocks surged to records Tuesday as strong AI-related earnings and falling oil prices improved risk sentiment. The Dow climbed 1.9%, the S&P 500 gained 1.9%, and the Nasdaq advanced 2.7%. Technology led, with the semiconductor index rising nearly 7%, while economically sensitive industrial shares also performed well.

Palantir jumped nearly 30% after raising its revenue outlook, while Caterpillar gained about 6% following record sales and strong demand tied partly to data-center infrastructure. The reactions reinforced confidence that AI spending is translating into revenue beyond the largest technology companies.

Oil fell more than 5%, with Brent settling near $79.33, after U.S. and Qatari officials suggested progress toward an agreement with Iran that could eventually reopen the Strait of Hormuz. Shipping conditions have not materially improved, so the decline primarily reflected reduced geopolitical expectations rather than confirmed restoration of supply.

Lower crude prices eased inflation concerns and helped pull the 10-year Treasury yield toward 4.63%. The dollar index slipped about 0.1%. June job openings remained relatively firm at approximately 7.4 million, suggesting labor demand is cooling only gradually. Markets appeared to reduce expectations for a near-term Federal Reserve rate increase as oil and yields declined.

What traders should watch next: Wednesday’s ADP employment report, earnings reactions from AMD and SpaceX, and whether diplomatic progress with Iran is confirmed. Any reversal in oil or Treasury yields could quickly test Tuesday’s technology-led rally.