U.S. stocks pushed to fresh records on Tuesday after Treasury Secretary Scott Bessent said a deal to reopen the Strait of Hormuz could come as soon as Tuesday or Wednesday, a shift that sent oil lower and lit a fresh risk-on rally across Wall Street. The Dow Jones Industrial Average and S&P 500 both broke through to new highs as traders moved fast to price in easier energy flows.
Bessent said on CNBC that the United States and Iran were moving toward a more normalized position amid the war, and that any agreement could reopen the highly important shipping lane this week. Brent crude fell another 5% below the $80 mark, while West Texas Intermediate crude dropped 5% to trade around $75 a barrel. The 10-year US Treasury yield also slipped 5 basis points to around 4.62%, adding to the sense that investors were easing back from defensive bets.
By Tuesday afternoon, the Dow was up 900 points and the Nasdaq 100 had climbed nearly 3%, with big tech and AI names helping carry the market. Palantir rose 27% after reporting commercial revenue that beat estimates, and Caterpillar gained 6% after beating earnings estimates. The move showed how quickly traders can rotate when oil supply fears cool and growth stocks regain favor.
That rotation did not lift every corner of the market. Amazon dipped 2% even after reaching a $3 trillion valuation earlier in the week, a reminder that record-setting indexes can still hide sharp shifts beneath the surface. Earlier in July, a volatile swing in the AI trade had sent investors on a roller coaster ride, and Bret Kenwell of eToro said the latest move looked like a “long-overdue rebalancing” after valuations compressed and sentiment bruised.
Kenwell added that with valuations compressed, sentiment bruised, and massive AI investments beginning to translate into tangible revenue growth, Wall Street may be rethinking its retreat from mega-cap tech. Piper Sandler strategists said the bull market was reasserting itself through broader participation, falling volatility and strong rotational activity, but warned that fresh highs need stronger market breadth before the advance can turn into a more durable uptrend. SpaceX was due to report earnings after the closing bell on Tuesday, and it faces another test on Thursday when it unlocks its first wave of insider shares.
