A trader reacts on the floor at the New York Stock Exchange on Aug. 22, 2025.
Brendan McDermid | Reuters
Stocks had a banner day Tuesday, with the S&P 500 and Dow Jones Industrial Average scaling to fresh record highs, thanks to strong earnings and another decline in oil prices driven by hope that the Strait of Hormuz could be reopened.
The broad market index gained 1.79% and hit a fresh high for the first time since June, closing at 7,736.52. The Nasdaq Composite popped 2.59% to close at 26,584.99, as Palantir Technologies rallied 29%. The Dow surged 907.47 points, or 1.71%, to end at 54,085.88. The 30-stock index was led by more than 5% rise in Caterpillar, surpassing its intraday record from last month.
Both the S&P 500 and the Dow also posted record closes.
Beyond tech, which jumped 4%, other parts of the market saw solid gains. Financials advanced 0.9%, led by key stocks like Goldman Sachs, which gained more than 2%. Industrials and materials rose nearly 2% apiece.
S&P 500, year-to-date
Oil prices moved lower after Treasury Secretary Scott Bessent said in an interview on CNBC’s “Squawk Box” that “we are in talks with the Iranians.” He then added, “There is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict.”
West Texas Intermediate futures settled down 5.69% to $75.77 per barrel. Brent crude, the international benchmark, declined 5.26% to $79.36 a barrel.
Palantir shares notched their best day in more than two years after the company posted blowout results for the second quarter, which CEO Alex Karp described as “otherworldly” as a result of AI sovereignty demand. Chip stocks rallied, continuing their comeback from a washout in July. Micron Technology gained more than 7%, while Marvell Technology advanced nearly 13%.
Caterpillar was the biggest gainer in the Dow after reporting better-than-expected Q2 numbers as well as upping its revenue growth guidance, with the industrial giant noting strong demand for its equipment as the AI data center buildout ramps up across the country. The company also said its tariff costs outlook for the full year should come in at the lower end of its previously expected range.
It’s been a stellar earnings season, as more than 84% of S&P 500 companies that have reported earnings have beaten expectations, according to FactSet.
“From watching the stock market zoom higher over the past three sessions, you wouldn’t think there’s anything wrong with the world,” said Thierry Wizman, global FX & rates strategist at Macquarie Group. “After all, even the semiconductor makers have recovered from their big skid in July after some [artificial intelligence] hyperscalers managed to quell analysts’ fears about whether their data center investments are excessively eating into cash-flow. And so far, U.S. quarterly earnings reports haven’t disappointed, in aggregate.”
The major stock averages surged in Monday’s session to start August trading. The Dow closed at a record high, as Amazon eclipsed $3 trillion in market cap for the first time. Amazon pulled back 2% Tuesday after Jeff Bezos filed to sell around $4 billion worth of shares.