Wall Street hits fresh record highs on blowout AI earnings and Iran optimism

 

Wall Street hits fresh record highs on blowout AI earnings and Iran optimism

US stocks surged to record levels this week in a rally powered jointly by strong corporate earnings and easing fears over the Middle East. The S&P 500 and Dow Jones Industrial Average both closed at all-time highs, with the Dow climbing over 900 points (about 1.7%) and the Nasdaq Composite jumping 2.6% in a single session, as falling oil prices tied to the prospective Iran shipping deal combined with a wave of upbeat tech results to lift sentiment broadly.

Data-analytics firm Palantir was the standout, with shares surging as much as 26% after the company sharply raised its full-year revenue and profit guidance on stronger-than-expected demand from commercial customers, pushing the stock through the $150 mark. Caterpillar also rallied on continued demand tied to AI-driven infrastructure buildout, while gains extended into memory-chip and optical-communication stocks as investors bet the AI spending cycle still has room to run.

Not every earnings reaction was positive: SpaceX, in its first-ever quarterly results as a newly public company, reported revenue roughly doubling year-over-year, yet its shares fell after hours as investors weighed higher-than-expected AI infrastructure spending against the growth numbers. Chipmaker AMD also reported after Tuesday's close, with its outlook failing to fully satisfy investors even as the broader AI trade stayed intact.

The rally comes as markets brace for a heavier run of economic data this week, including Wednesday's ADP private payrolls report and Friday's closely watched government jobs figures, after recent readings pointed to a cooling labor market. Private payrolls rose by a net 98,000 in June, the weakest gain in three months and below forecasts, with ADP's chief economist attributing the pattern to a broader slowdown in job creation. With hiring data softening and the Federal Reserve's next moves in focus, traders are watching closely for signs of whether this week's record highs reflect durable strength or a rally that's outrunning the underlying economy. TRADING ECONOMICS