Dow Shatters Records as Iran Optimism Fuels Wall Street Rally

Wall Street stocks surged to a new record high on Monday as optimism over de-escalating US-Iran tensions led to lower oil prices and Treasury yields. The Dow Jones Industrial Average rose by 693.38 points, or 1.32 per cent, to close at 53,178.41.

The drop in oil prices helped ease concerns about the potential impact of a prolonged conflict on the US economy, which had contributed to stock market volatility in July. However, investors remain focused on the rate outlook from the Federal Reserve, with markets pricing in a 64.5 per cent chance of a rate hike at the September meeting.

Strong earnings reports also boosted stocks, with Communication services leading the pack and climbing by 4.3 per cent. Amazon shares advanced 4.6 per cent after its market cap surpassed $US3 trillion ($A4.3 trillion) for the first time, while SpaceX jumped 5.6 per cent ahead of its quarterly results.