Dow and S&P 500 Reach New Records on AI Earnings and Mideast Deal Hopes

The Dow Jones Industrial Average and S&P 500 surged to fresh records on Tuesday, buoyed by strong earnings from AI-linked companies and hopes for a diplomatic resolution in the Middle East.

Palantir Technologies led the pack with a nearly 30% gain after raising its annual revenue forecast. Caterpillar's 6% jump was the largest contributor to the Dow's 998-point rise, accounting for over 300 points of the increase.

The buildout of AI data centers is fueling demand for Caterpillar's power-generation and construction equipment, making it a bellwether for the global industrial economy. Chip stocks also surged, with the Philadelphia Semiconductor index rising nearly 7%.

A drop in crude prices on hopes for an Iran deal further boosted sentiment. US Treasury Secretary Scott Bessent said a deal to reopen the Strait of Hormuz could come within the next two days.