US stocks hit records at open as Hormuz deal hopes lift sentiment

US stocks climbed to record highs on Tuesday as optimism over a possible US-Iran agreement to reopen the Strait of Hormuz pushed oil prices lower, while strong corporate earnings boosted investor sentiment.

The S&P 500 rose 0.5% to a fresh intraday record, while the Nasdaq Composite gained 0.9%. The Dow Jones Industrial Average surged more than 700 points, or 1.4%, also reaching an all-time high.

US Treasury Secretary Scott Bessent said Washington was in talks with Iran and that an agreement to reopen the strategic waterway could be reached on Tuesday or Wednesday.

"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," Bessent told CNBC.

Oil prices fell after the remarks, with West Texas Intermediate declining about 5% to around $76 per barrel and Brent crude dropping 4% to roughly $80.

Palantir Technologies shares jumped more than 20% after the artificial intelligence software company reported strong second-quarter results and raised its full-year forecasts despite criticism over its support for Israel's Gaza war.

Caterpillar climbed about 10% after beating quarterly expectations and raising its revenue growth guidance, while Micron Technology gained 4% and Marvell Technology advanced 11%.

The rally extended Monday's gains, when the Dow closed at a record high and Amazon's market capitalization surpassed $3 trillion for the first time.