Major United States benchmark averages closed higher on Tuesday (Wednesday AEST), with the Dow Jones Industrial Average and S&P 500 finishing at record highs after upbeat earnings from artificial intelligence-linked companies eased concerns over AI spending, while hopes for progress in the Iran conflict pushed oil prices and Treasury yields lower.
The Dow Jones Industrial Average climbed 907.5 points, or 1.7%, to 54,085.9. The S&P 500 advanced 136.0 points, or 1.8%, to 7,736.5, while the Nasdaq Composite surged 671.1 points, or 2.6%, to 26,585.0.
The Dow recorded its second consecutive record close after reaching its first all-time high since 6 July on Monday. Meanwhile, the S&P 500 posted its first record closing level since 2 July.
Palantir Technologies jumped 29.5%, marking its biggest one-day gain since February 2024 after lifting its full-year revenue forecast.
Caterpillar, widely regarded as a bellwether for the global industrial economy, rose 5.6% after increasing its annual revenue growth outlook, citing strong demand for power generation and construction equipment driven by the expansion of AI data centres.
Market sentiment was also supported as crude oil futures fell over 5% after a Qatari official said diplomatic efforts to resolve the Iran conflict were continuing.
Adding to the optimism, U.S. Treasury Secretary Scott Bessent said an agreement with Iran to reopen the Strait of Hormuz could be reached within the next two days.
SpaceX shares gained 9.4% ahead of the company's quarterly earnings release. However, the stock fell 6.9% in after-hours trading after reporting its first results as a public company.
Elsewhere, McDonald's added 1.2% despite posting weaker-than-expected earnings, while Pfizer rose 1.5% after delivering stronger quarterly results.
Economic data showed U.S. job openings declined in June, largely due to a sharp drop in the healthcare and social assistance sector.
However, higher hiring levels and low layoffs suggested the labour market remained resilient ahead of Friday's closely watched non-farm payrolls report.
On the bond markets, the 10-year and two-year U.S. Treasury yields fell 1.3% and 1.1% to 4.615% and 4.194%, respectively.
