Wall Street hits records as oil slides on Iran talks, Palantir surges 29%

US indices hit all-time highs

The S&P 500 climbed 1.79% to close at 7,736.52, its first record since June. The Dow Jones Industrial Average added 907.47 points, or 1.71%, to finish at 54,085.88, breaking the 54,000 barrier for the first time. The Nasdaq Composite surged 2.59% to 26,584.99. Technology led all sectors with a 4% gain, while financials rose 1% (Goldman Sachs added more than 2%) and both industrials and basic materials advanced nearly 2% each.

Oil tumbles on Strait of Hormuz talks

Crude prices fell sharply after US Treasury Secretary Scott Bessent told CNBC that Washington is in direct talks with Tehran. The comments raised hopes that the Strait of Hormuz, a critical chokepoint for global oil shipments, could reopen soon.

We are in talks with the Iranians. There is a possibility of an agreement today or tomorrow to open the Straits, so we can move toward a more normalized situation in the conflict.

West Texas Intermediate futures settled 5.69% lower at $75.77 a barrel, while Brent crude dropped 5.26% to $79.36. The slide in energy costs fed directly into equity gains, as lower oil eases input costs and inflation fears.

European bourses join the rally

The rally was not confined to New York. In Paris, the CAC 40 rose 0.61% to 8,666.63, surpassing its pre-Iran-war record from 26 February 2026. Frankfurt's DAX added 0.77% to 26,202.35, breaking the record it set a day earlier. Milan's FTSE MIB gained 1.26% to 53,540.50, above its previous high of 52,959.14 from 6 July, and Madrid's IBEX 35 closed above 20,000 points for the first time, up 0.21% to 20,023.60. London's FTSE 100 edged up 0.20% but was held back by falling oil majors (BP lost 4.91%, Shell 2.47%).

The shift to German stocks brings a surprisingly positive dynamic to the DAX at the start of an otherwise usually quiet August. The main drivers are the continued fall in energy prices and convincing quarterly results and their future prospects.

Earnings fuel tech and industrial names

Palantir Technologies was the standout, soaring 29% in its best single-day performance in more than two years. CEO Alex Karp called the second-quarter results "unreal" and attributed the strength to booming demand for AI sovereignty solutions. The company also raised its full-year revenue and profit forecasts. Semiconductor stocks extended their recovery from July's sell-off: Micron Technology gained more than 7% and Marvell Technology jumped nearly 13%.

Caterpillar was the top performer in the Dow, rising about 6% after reporting better-than-expected quarterly results and lifting its revenue growth outlook. The industrial giant cited robust demand for equipment tied to AI data center construction.

What's next: SpaceX results awaited

Investors are also counting down to the first earnings release from SpaceX since its stock market debut on 12 June. The report is expected to draw intense scrutiny of the Starlink satellite internet business, which analysts view as the cash engine funding Elon Musk's broader ambitions, including artificial intelligence.

Investors will focus on Starlink, the cash-generating engine to finance other expenses of Elon Musk's companies, especially artificial intelligence.