The S&P 500 soared above 7,700 points in early August 2026, reaching an all-time high fueled by strong corporate earnings linked to artificial intelligence and hopes of a US-Iran agreement to reopen the Strait of Hormuz [1, 2, 3, 4, 5]. The Dow Jones Industrial Average also climbed to multiple record closing highs above 54,000 points, with the latest close at 54,085.88 points [2, 4, 5, 6].
US Treasury Secretary Scott Bessent and Secretary of State Marco Rubio expressed optimism that a deal to reopen the Strait of Hormuz could be reached as soon as August 4 or 5, which helped ease geopolitical risks and drove oil prices down. Brent crude prices fell below $80 per barrel amid hopes the deal would normalize oil supplies [7, 8, 5, 6, 9]. Bessent said, "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" [6]. Wells Fargo's Tony Miano said markets were reacting to potential easing of energy price pressures, noting lower oil prices can help reduce inflation concerns [7].
Corporate earnings from AI-focused companies further boosted investor confidence. Palantir Technologies reported $1.94 billion in revenue for Q2 and raised its full-year forecasts, pushing shares up about 29.5% on the day [4, 5, 6]. Caterpillar also raised its annual revenue growth outlook, driven by AI data center investments, with shares jumping between 5.6% and 10% [2, 4, 6]. However, some investors remained cautious. Jack Ablin of Cresset Capital said, "I don't sense one ounce of skepticism among investors... but I'm not sure a handful of earnings reports justifies new records in the S&P" [4].
Commodity markets reflected the positive momentum. Copper prices neared record highs, closing at around $14,201 per tonne on the London Metal Exchange on August 7. This rise was supported by tight supply, strong demand, tariff uncertainties, and Middle East peace prospects. Analyst Ewa Manthey said, "Copper fundamentals remain supportive. Tight physical markets, low inventories and constrained mine supply should continue to underpin prices" [10, 11].
US Treasury yields fell as investors anticipated that the Middle East deal could reduce inflation pressures [7, 8]. The positivity on Wall Street spilled over into Asia-Pacific markets, with stock indices in Australia, Japan, and South Korea rising following the US gains and the easing of tensions. The S&P/ASX 200 Index in Australia reached an intraday record high on August 5, boosted by strong local economic data as well [8, 12, 5, 9].
Asian stock futures pointed higher on August 8 after Wall Street's record-setting sessions and hopes of a Middle East deal [8]. The next key event will be the expected US-Iran agreement on reopening the Strait of Hormuz, which officials forecast could happen imminently.
