Overview
- U.S. stock indexes climbed to fresh records after a wave of stronger-than-expected Q2 results from companies such as Palantir, Caterpillar, Disney and Eli Lilly lifted investor confidence.
- Treasury Secretary Scott Bessent said this week there was a chance a deal to reopen the Strait of Hormuz could be reached imminently, comments that helped send oil prices sharply lower and supported bond markets.
- Falling crude pushed the U.S. 10-year Treasury yield down and reduced market odds of a September Fed rate hike, giving equities room to rally even as some economic data showed soft spots in hiring and factory orders.
- Not all gains were uniform: SpaceX plunged after reporting about $18.4 billion in Q2 capital spending for AI infrastructure, and AMD shares tumbled despite beats, highlighting investor concern that heavy AI capex may weigh on profits.
- The diplomatic optimism remains fragile because the Hormuz accord is not finalized and sporadic regional attacks continue, and the Strait of Hormuz still matters because it carries a large share of global oil shipments which can quickly sway prices and inflation expectations.