US stocks close at record highs as oil tumbles, earnings fuel tech rally

US stocks closed sharply higher Tuesday, with the Dow and S&P 500 reaching record highs as strong corporate earnings and falling oil prices fueled a broad Wall Street rally.

The S&P 500 gained 1.79% to 7,736.52, a new all-time high, while the tech-heavy Nasdaq Composite climbed 2.59% to 26,584.99.

The blue-chip Dow surged 907.47 points, or 1.71%, to a record of 54,085.88.

Technology stocks jumped around 4%, while industrials and materials rose nearly 2% each. The financial sector advanced 1%, with Goldman Sachs gaining more than 3.4%.

Investor sentiment was supported by a sharp decline in oil prices after US Treasury Secretary Scott Bessent said Washington and Tehran were holding talks and could reach an agreement as early as Tuesday or Wednesday to reopen the Strait of Hormuz.

US benchmark West Texas Intermediate crude futures settled 6.4% lower at $75.20 per barrel, while international benchmark Brent crude dropped 6% to $78.85.

Palantir Technologies surged 29.4% after the data analytics company reported stronger-than-expected second-quarter results and raised its full-year revenue forecast, despite criticism about its support for Israel's war in the Gaza Strip.

Semiconductor stocks also rallied, extending their recovery from sharp losses in July. Micron Technology gained 7.6%. Marvell Technology advanced 12.8%.

Caterpillar rose 5.4% after reporting quarterly results above market expectations and raising its revenue growth outlook. The company cited strong demand for equipment used in the expansion of artificial intelligence data centers. It said its full-year tariff costs were likely to come in at the lower end of its previous forecast.

Amazon shares, however, fell 2.3%, one day after the company’s market capitalization surpassed $3 trillion for the first time. The decline followed a regulatory filing showing that founder Jeff Bezos planned to sell around $4 billion worth of shares.

European stocks close higher

European stock markets also ended Tuesday’s session higher, supported by declining oil prices, technology shares and positive corporate earnings.

The pan-European Stoxx Europe 600 index rose 0.73% to a record 656.86 points.

Germany’s DAX 40 gained 0.77% to 26,202.35 points, while France’s CAC 40 increased 0.61% to 8,666.63.

Italy’s FTSE MIB 30 climbed 1.26% to 53,540.5 points, and the UK’s FTSE 100 added 0.2% to finish at 10,879.38.

Spain’s IBEX 35 rose 0.21% to a record 20,023.6 points, closing above 20,000 for the first time.