Dow, S&P 500 Soar to Records on AI Earnings, Iran Deal Hopes

The Dow and S&P 500 indices closed at record highs on Tuesday, thanks to strong earnings from AI-related companies. Palantir Technologies soared 29.5% after raising its annual revenue forecast, while Caterpillar jumped 5.6% after increasing its own growth projections.

Caterpillar's move was the biggest boost to the Dow Industrials, contributing about 280 points to the average. The AI-spending theme continued with chip stocks surging 6.6%, and the S&P 500 tech sector gaining 4.1% as the best performing sector.

Oil prices dropped by around 5% on hopes for a diplomatic resolution in the Iran conflict, which also reduced expectations of a Federal Reserve rate hike to 56.9% from 67.2%. Treasury yields retreated accordingly.