The U.S. stock market hit an all-time high on Tuesday as hopes for a deal to reopen the Strait of Hormuz and strong corporate earnings fueled investor optimism. The S&P 500, the most popular gauge of U.S. stocks, surged 1.8 percent to top 7,700 for the first time, surpassing its previous record of 7,620.90 set on June 2. The benchmark index has risen 12.80 percent so far this year, comfortably beating its historical average of about 10.5 percent.

Strong Earnings and Tech Gains

Palantir Technologies, a data analytics company closely tied to the U.S. and Israeli defense sectors, was among the biggest gainers, with its shares soaring 29.5 percent on the back of forecasting-busting second-quarter revenue of $1.94 billion. The company reported ‘otherworldly’ Q2 earnings, according to CNBC, due to demand for AI sovereign tools, the Nasdaq Composite closed at 26,584.99, a 2.59% gain.

Strait of Hormuz and Oil Prices

Brent crude, the primary international benchmark for oil prices, edged lower after falling about 5 percent overnight on hopes for an end to the months-long disruption to shipping in the Strait of Hormuz, a conduit for about one-fifth of global oil supplies before the start of the U.S.-Israel war on Iran in late February. U.S. Treasury Secretary Scott Bessant said in a CNBC interview that ‘we are in talks with the Iranians’ and that ‘there is a chance we may have a deal today or tomorrow to reopen the strait.’ U.S. Secretary of State Marco Rubio also said there was ‘progress in talks’ Tuesday between Iran and Oman to reopen the Strait of Hormuz.

Global Market Rally

The Dow Jones Industrial Average, which tracks 30 blue-chip companies, set a new record for a second straight day, climbing 1.7 percent to 54,085.88 — the rally continued in Asia on Wednesday morning, with key indexes in Japan and South Korea making major gains. Tokyo’s benchmark Nikkei 225 was up 3 percent as of 01:00 GMT, while the Kospi in Seoul was up 4.6 percent. Caterpillar stock led the Dow with a more than 5% rise after the company posted Q2 numbers that were higher than expected and reported strong demand for its construction equipment for AI data centers.