U.S. equities surged Monday, lifted by strong corporate earnings and optimism around easing geopolitical tension. The Dow Jones Industrial Average rose 1.71%, closing above 54,000 for the first time and setting a new record close. The S&P 500 gained 1.79% and also hit a record. The Nasdaq Composite climbed 2.59%, led by technology shares.
Investor positioning flipped quickly from recent volatility to aggressive buying, with major indexes moving from roughly one-month lows to fresh highs within a few sessions.
Hormuz negotiations eased supply worries and pushed oil lower
The main macro development was a sign of de-escalation around the Strait of Hormuz. According to Axios, the U.S., Iran and Oman are close to a temporary agreement that could be formally announced on Wednesday local time. The plan is designed to reopen the Strait of Hormuz, restore a U.S.-Iran ceasefire, and create conditions for follow-up talks on the nuclear issue.
That report eased market concern over energy supply disruptions and sent oil prices lower. WTI crude dropped 5.58%. It is down 13.27% in August and is now fluctuating near $73.5. Brent crude fell below $80 and touched a low of $77.7, bringing its monthly decline to about 12%.
The arrangement is currently expected to last 60 days and could be extended. Under the proposal being discussed, inbound vessels would use the northern lane near the Iranian coast, while outbound vessels would use the southern lane near the Omani coast, with Oman and Iran jointly coordinating traffic.
The plan also includes mine-clearing work. The parties aim to clear mines from the central channel of the Strait of Hormuz within 30 days. Bloomberg reported that Iran has softened its position and is for the first time considering allowing European countries to take part in the operation in order to build trust with shippers and insurers. During the 60-day temporary arrangement, no tolls or related charges would be collected.
For the longer term, Oman has proposed a model modeled on the Strait of Malacca, with Gulf states and relevant European members of the International Maritime Organization jointly funding a voluntary fund for channel maintenance, search and rescue, and security. In addition to Oman, Qatar, Pakistan and Saudi Arabia have also taken part in mediation efforts.
Even so, uncertainty remains. Hardliners in Iran’s Revolutionary Guard still disagree over foreign involvement in mine clearance and control over the shipping lane, and past agreements have broken down and triggered military escalation.
Lower oil softened inflation fears and shifted rate expectations
The slide in oil prices helped ease inflation worries. The yield on the 10-year U.S. Treasury fell about 6 basis points to around 4.6%, giving risk assets another tailwind.
Wells Fargo and other institutions said lower oil prices should help reduce energy-price pressure, though broader price stickiness remains and inflation is unlikely to normalize overnight. The U.S. dollar weakened slightly, while the yen’s advance stalled.
On rates, CME FedWatch showed the probability of a 25-basis-point hike in September at about 57.1%, down sharply from 67.2% the previous day. The probability of no change stood at 42.9%. The market is now watching Friday’s nonfarm payrolls report closely. A strong reading could reinforce expectations for tighter policy, while a soft report would leave more room for the Federal Reserve to stay put.
JPMorgan and others said employment data will be the key short-term pricing trigger while oil remains the main driver of Treasury moves.
AI trade broadened beyond chips
AI was again the strongest theme in U.S. stocks, but the rally was broader than earlier moves that leaned mainly on semiconductor names. Palantir’s results were taken as evidence that AI applications can convert into revenue growth. Semiconductor, memory and optical communications stocks pointed to sustained demand for computing power, while Caterpillar showed that data center buildouts are beginning to feed through to traditional industrial equipment.
The Philadelphia Semiconductor Index jumped 6.55% for a fourth straight daily gain, with most of its 30 components advancing. Memory chips, optical communications, AI software, data center infrastructure and industrial equipment all outperformed. The Nasdaq-100 rose about 3.3% in a single day, its biggest one-day gain since May 2025.
Megacap technology shares mostly moved higher. Nvidia gained more than 2%, Apple, Microsoft and Tesla rose more than 1%, and Alphabet added 1.11%, while Amazon fell more than 2%. Over the past four trading sessions, the Magnificent Seven are up nearly 10% in total, suggesting capital has moved back into large-cap growth stocks.
Goldman Sachs chief technology trader Peter Callahan said the rally had four drivers: the market had already gone through a de-risking phase and positioning was cleaner; technical conditions improved; the Nasdaq-100 still trades at roughly a 10% discount to its five-year average valuation; and earnings season has improved confidence in profit trends.
Goldman’s trading desk also warned that volume was 7% below the five-day average. Index gains were strong, but not all capital has fully returned, and the next leg will still depend on earnings and macro data.
Company moves: Palantir, Caterpillar, SpaceX, AMD, Nvidia, Micron, Intel and Bitdeer in focus
Palantir rose 29.45%
Palantir broke decisively above its 200-day moving average. Second-quarter revenue jumped 93% year over year to $1.935 billion, while U.S. commercial revenue rose 149%. CEO Alex Karp called it an “outlier” quarter and said demand for AI sovereignty is starting to show up.
Other AI software names moved with it. Datadog and Shopify rose more than 5%. ServiceNow and Applovin gained more than 3%, while Adobe and Salesforce rose more than 2%.
Caterpillar gained more than 5% and hit a record
The heavy equipment maker posted second-quarter sales above $20 billion for the first time, up 24% year over year, and raised full-year guidance across the board. Wells Fargo strategist Ohsung Kwon said Caterpillar is one of the traditional stocks most closely tied to the AI theme, with spillover benefits from data center construction only beginning.
Industrial stocks are up about 20% so far this year.
SpaceX closed up 9.43%, then fell nearly 9% after hours at one point
Elon Musk confirmed that AI services will run exclusively on Nvidia architecture and also set sights on the U.S. telecom market. Space-related names rose broadly. Rocket Lab gained nearly 6% after securing a $397 million contract from the U.S. Space Force, and AST SpaceMobile rose nearly 11%.
After hours, SpaceX’s first earnings release showed second-quarter revenue of $7.8 billion, up 92% from a year earlier, with EBITDA surging as well. But AI-related capital spending reached $15.8 billion, and that level is expected to stay elevated in coming quarters.
AMD rose 7%, then fell nearly 8% after hours
CEO Lisa Su said data center sales are expected to double by 2027 and announced partnerships with Anthropic and others. Semiconductor shares jumped broadly. ARM rose 17.36%, Marvell Technology gained nearly 13%, Intel climbed nearly 11%, Qualcomm rose 7.23%, Broadcom added nearly 7%, and TSMC rose more than 2%.
AMD’s second-quarter results, released after the close, showed revenue of $11.54 billion, up 50% year over year and above expectations. Still, the company’s third-quarter revenue guidance did not fully impress the market.
Nvidia rose 2.56%
Nvidia CEO Jensen Huang announced that Alpamayo 2 Super is now officially open-sourced for commercial use. The model is an open-source inference model aimed at autonomous driving and is intended to support robotaxis, robots and logistics vehicles.
SpaceX also said its future AI services will run “exclusively” on Nvidia systems and that it plans to deploy Nvidia Vera Rubin NVL72 rack-scale systems on both ground and space platforms.
Micron rose 7.62% and rejoined the trillion-dollar club by market value
Bank of America reiterated its Buy rating on Micron and kept a $1,550 price target, calling the recent pullback an “excellent buying opportunity.” It also said memory chip prices are expected to normalize in 2027 to 2028.
Memory names climbed across the board. Sandisk rose 10.84% after it and SK Hynix published the first standard specification for high-bandwidth flash, or HBF. Rambus gained more than 9%, SK Hynix rose more than 8%, and Western Digital added more than 4%.
Intel rose 10.84%
Media reports said Intel’s EMIB-T advanced packaging technology has made progress, with packaging yields approaching 90% and costs roughly 50% below TSMC’s CoWoS approach. Intel expects to provide the packaging service at scale in 2027 and is continuing work on its large wafer fab campus in Ohio, with full operations targeted for 2031.
Oracle rose 2.74%, but debt concerns remained
Oracle shares have been cut roughly in half since June, and the company’s five-year credit default swap spread has jumped to a record above its 2008 financial crisis peak. The company has taken on heavy debt to fund AI data center expansion, pushing total debt to $129.5 billion. S&P Global has cut Oracle’s credit rating to BBB-, just one notch above junk, and Moody’s warned leverage could approach 5x.
The market is worried about a mismatch between Oracle’s 15-year long-term leases and shorter-term AI contracts.
Bitdeer spiked as much as 23% intraday, then closed up 0.09%
Bitdeer signed a 16-year data center hosting and services agreement with Norwegian cloud startup Volta Infra to deploy Nvidia GPUs and serve leading AI labs. At the same time, Anthropic was reported to have reached a six-year, $10 billion compute agreement with Volta.
Arista Networks jumped after hours
Arista Networks closed up 3.04% and then rose 12.5% after hours. Supported by AI networking demand, second-quarter revenue came in slightly above $3 billion, up 37.7% year over year. The company also raised its 2026 outlook for the third time and now expects full-year revenue of $12.6 billion, implying growth of about 40%.
Apple rose nearly 2%
Apple has started preparing for its September launch event, and U.S. retail employees can apply to work on site. The event is expected to take place in the first half of September. Separately, a report said Apple asked a judge to immediately bar OpenAI from using its trade secrets and demanded the return of all confidential information.
What the market is watching next
Investors are looking to major earnings due on Aug. 5, including Circle, Uber, Eli Lilly and BeiGene.
On Aug. 6, Thursday, up to 911.5 million SpaceX lockup shares are due to be released. Based on the latest share price, the potential value is close to $100 billion, making it the week’s biggest liquidity test. Limited selling pressure after the release could support confidence in demand for richly valued technology assets. Concentrated selling, on the other hand, could weigh on the Nasdaq and on sentiment around Musk-linked assets.
Later, after-hours results from Sandisk and Western Digital are due at 05:00. Those reports are expected to directly shape sentiment in memory stocks. The market will be watching enterprise SSD demand, NAND pricing, AI data center storage demand, inventory cycles and second-half guidance, all of which matter for Micron, Sandisk and SK Hynix.