AI earnings and Iran deal hopes lift stocks

Global stock markets rallied to record highs in early August 2026, driven by strong earnings from AI-related companies and growing optimism over a potential US-Iran deal to reopen the Strait of Hormuz. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed at record highs, with the Dow surging over 900 points on August 4. European Union — European and Asian markets also hit records, led by semiconductor and AI stocks. Oil prices tumbled over 5% on hopes for a diplomatic resolution to the Iran war, easing inflation concerns and reducing expectations of a United States — Federal Reserve rate hike. Key earnings beats from Palantir, Caterpillar, and others reinforced confidence in AI-driven demand. Meanwhile, the US and Japan conducted coordinated intervention to support the yen, and the India — Indian rupee strengthened on lower oil prices. The event reflects a broad market rally fueled by AI optimism and geopolitical de-escalation.