Palantir surge helps US stocks hit record highs as oil prices fall

U.S. Equities closed Tuesday, 4 August 2026 at fresh all-time highs, powered by robust corporate earnings reports and declining oil prices that eased inflation concerns. The S&P 500 rose 136.02 points, or 1.79%, to finish at 7,736.52, topping a record set a couple of months earlier and securing its first closing record since early July 2026. The Dow Jones Industrial Average added 907.47 points, or 1.71%, to close at 54,085.88, marking a second straight daily high after notching a record the day before. The Nasdaq composite jumped 671.10 points, or 2.59%, to 26,584.99.

Wall Street reached its latest apex despite lingering investor worries regarding high inflation, the war in Iran, economic frustration, and potential stock market bubbles driven by the artificial-intelligence boom. Strong long-term alignment between stock prices and corporate earnings helped reward patient investors.

Media additions

AI earnings lift the market

• Palantir Technologies surged 29.5%, recording its biggest daily percentage gain since February 2024, after chief executive Alex Karp announced that overall revenue leaped 93% in what he termed an “otherworldly” quarter. The AI company also raised its revenue forecast for the full year of 2026.
• Caterpillar climbed 5.6% after reporting stronger-than-expected profit and revenue, marking the first quarter in which the heavy-equipment maker posted more than $20 billion in sales and revenue. CEO Joe Creed highlighted robust order rates and a growing backlog across main businesses, noting that Caterpillar is benefiting from the AI boom through increased demand for turbines used to power data centers. The move made Caterpillar the biggest boost to the Dow Industrials, accounting for about 280 points to the upside.
• Broad earnings strength – According to FactSet data, companies in the S&P 500 index were on track to deliver growth of nearly 50% in earnings per share for the spring quarter from a year earlier, representing the biggest jump since 2021 when the economy rebounded from the COVID-19 pandemic. Furthermore, LSEG data indicated that 85.2% of the 304 S&P 500 firms that had reported second-quarter results beat estimates, surpassing the long-term 67.5% average, with every major S&P sector showing profit growth. Amazon and Microsoft also delivered strong results ahead of the week.

With corporate profits soaring while stock prices remained roughly where they were two months ago, stocks appeared less expensive than before, according to Phil Segner, co-portfolio manager at the Leuthold Group.

"I don’t sense one ounce of skepticism among investors, from oil to interest rates to equities," said Jack Ablin, chief investment strategist and founding partner at Cresset Capital Management in Chicago. "The earnings reports were certainly supportive, and that’s great news, but I’m not sure a handful of earnings reports justifies new records in the S&P."

Jack Ablin, chief investment strategist, via The Globe and Mail

Oil, yields and the broader macro picture

Helping stocks on Tuesday was another sharp drop in oil prices. Brent crude, the international standard, sank 5.3% to $79.36 per barrel following a statement from a Qatari official that diplomatic efforts to resolve the Iran conflict were continuing. U.S. Treasury Secretary Scott Bessent added that a deal with Iran to reopen the Strait of Hormuz could arrive within the next two days.

The tumble in crude prices followed weeks of sharp swings between $72 and $102 through July driven by uncertainty surrounding the war with Iran and oil tankers exiting the Persian Gulf. The latest decline helped ease Wall Street inflation worries, which in turn pulled down bond market yields and relaxed pressure on the broader economy and investment prices.

The yield on the benchmark U.S. 10-year Treasury note fell to 4.62% (or 4.627%) from 4.70% on Monday and 4.75% at the end of the previous week, though it remained well above its 3.97% level from before the war with Iran. Lower yields reduce borrowing costs for Americans, ranging from homebuyers seeking mortgages to major corporations building AI data centers. The drop in oil prices also reduced expectations for a Federal Reserve rate hike at its September meeting down to 56.9% from 67.2% in the prior session, according to CME FedWatch.

U.S. Economic reports showed continued resilience. U.S. Employers advertised nearly 7.4 million job openings at the end of June, representing a slight slowdown from May that was close to economists' expectations. Separate data showed a drop in June job openings driven by a sharp decline in the healthcare and social assistance sector, though a rise in hiring and low layoffs kept the labor market stable ahead of Friday's government payrolls report.

Sectoral spillovers and international markets

• Computer chip companies strengthened significantly, led by a 2.6% gain for Nvidia, a 6.6% climb for Broadcom, and a 7.6% jump for Micron Technology as forces lifting the S&P 500.
• The Philadelphia Semiconductor Index shot up 6.6%, marking its fourth straight session of gains after tumbling 20.6% in July.
• The S&P 500 tech sector gained 4.1% as the best performing of the 11 major S&P sectors.
• Chipotle Mexican Group fell 9.7% on fears that future profits could be impacted after the chain removed jalapeños from some restaurants following a salmonella outbreak. Chipotle noted that Minnesota health officials had no ongoing concerns with the company.

Across the Atlantic, European and Asian stock indexes rose modestly. South Korea’s Kospi climbed 1.6% following sharp volatility driven by dominant AI-exposed companies Samsung Electronics and SK Hynix, after having dropped 5.1% and soared 17.9% in the prior two days.

Advancing issues outnumbered decliners by a 2.84-to-1 ratio on the New York Stock Exchange and by a 2.89-to-1 ratio on the Nasdaq. Volume on U.S. Exchanges reached 18.89 billion shares, compared with the 17.33 billion average for the full session over the last 20 trading days. The S&P 500 posted 27 new 52-week highs and three new lows, while the Nasdaq Composite recorded 138 new highs and 54 new lows. McDonald’s advanced 1.2% despite disappointing results, and Pfizer gained 1.5% after reporting upbeat quarterly results.

Canada joins the record-setting rally

The Canadian benchmark stock index also closed at a record high. Toronto’s S&P/TSX Composite index ended up 575.45 points, or 1.6%, at 35,801.59, marking its biggest one-day gain since April 30 and eclipsing the record closing high posted the previous Tuesday. Canadian markets had been closed for a holiday on Monday, making part of the session's advance a catch-up to Wall Street's Monday performance.

"The new record highs on both major markets puts an exclamation point on the near-four-year rally from the 2022 lows," commented Douglas Porter, chief economist with BMO Capital Markets, via The Globe and Mail.

Toronto's materials group advanced 5.2%, led by a 15.8% gain for Americas Gold and Silver shares, while gold prices rose 0.6% as falling oil prices tempered inflation fears. Canadian technology added 7.1% with Celestica Inc shares up 12.9%, industrials rose 3.1%, and heavily weighted financials ended 0.8% higher, while the energy sector lost 2.9%. Data released concurrently showed Canada’s trade surplus reached a four-year high of C$3.86 billion in June as a weaker Canadian dollar inflated export and import values. WestJet, majority-owned by Onex Corp, announced a gradual resumption of operations after reaching a tentative agreement with flight attendants to end a strike that caused numerous cancellations over the holiday weekend, pushing Onex shares up 5.6%.