Stock Market Soars on Iran Deal Hopes and Strong Earnings Growth
The stock market experienced a significant surge on Tuesday, with the Dow Jones Industrial Average rising by over 900 points. This marked its best day in nearly two months, and it's clear that multiple factors contributed to this rally.
According to Paul Hickey, co-founder at Bespoke Investment Group, 'it's not just one specific news event causing the rally. You're getting a succession of events.' One key factor was the comments made by Treasury Secretary Scott Bessent on CNBC regarding potential US-Iran deal that could reopen the Strait of Hormuz.
Bessent stated, 'We are in talks with the Iranians... There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.' This news sent Dow futures soaring and had a positive impact on oil prices, which fell, and bond yields, which tumbled.
Another factor driving the market was strong earnings growth. The S&P 500 is expected to deliver second-quarter earnings growth of 27% on a yearly basis, excluding mark-ups at Alphabet and Amazon. This is a 4% beat compared to consensus estimates from the start of the earnings season.