Stock Market Surges on Earnings, Tech Rally, and Iran Deal Hopes

The stock market surged on Tuesday, with the Dow Jones Industrial Average rising by over 900 points to its best day in nearly two months. The S&P 500 also jumped nearly 2%, reaching a new all-time high and one of its biggest single-day advances this year.

Treasury Secretary Scott Bessent told CNBC that the US and Iran could reach a deal to reopen the Strait of Hormuz, a key passageway for global crude trade. This news sent oil futures tumbling and bond yields plummeting, further supporting the equity rally.

The market's strong earnings backdrop was also a major contributor to the surge. The S&P 500 is on track to deliver second-quarter earnings growth of 27% year-over-year, excluding mark-ups from Alphabet and Amazon. This has led some analysts to predict that the index could reach as high as 8,100 by year-end.

Additionally, the tech sector saw a broad rally, with the iShares Semiconductor ETF jumping over 6% and the iShares Expanded Tech-Software Sector ETF adding nearly 5%. The Nasdaq Composite rose more than 2.5%, with even the 'Magnificent Seven' megacap stocks joining in on the rally.

Technical analysts have been watching the S&P 500's break above a key resistance level, which brought on further buying. The index opened above the 7,620 level and closed above 7,700 for the first time ever, adding to conviction that the rally has legs.