AI earnings drive record stock highs

A wave of strong corporate earnings, particularly from AI-related companies, drove major U.S. stock indexes to record highs in early August 2026. Microsoft, Amazon (company), Palantir, and Caterpillar reported better-than-expected results, easing investor concerns about the massive capital expenditures on AI infrastructure. The rally was further supported by falling oil prices on hopes of a diplomatic resolution to the U.S.-Iran conflict, which could reopen the Strait of Hormuz. However, volatility persisted, especially in chip stocks, with the KOSPI experiencing historic swings. The United States — Federal Reserve's policy uncertainty and inflation concerns remained key risks, with markets pricing in a possible rate hike in September.