U.S. stock futures traded firmly higher on Tuesday, pointing to another positive start for Wall Street as investors responded to strong corporate earnings, lower oil prices and encouraging economic data.
Technology stocks looked set to lead the advance, with Nasdaq 100 futures gaining 1.1% ahead of the opening bell.
Palantir Powers Technology Sector Higher
Palantir (NASDAQ:PLTR) jumped more than 15% in pre-market trading after reporting better-than-expected second-quarter results and lifting its guidance for the full year.
“This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%,” said Palantir Co-Founder and CEO Alex Karp. “The sovereign AI revolution makes us very optimistic about the future.”
The strong earnings report helped lift sentiment across the broader technology sector before the market opened.
Oil Retreat Supports Risk Appetite
Investor confidence also received a boost from another sharp decline in crude oil prices.
U.S. crude futures dropped more than 3% after sliding over 5% on Monday as hopes for renewed diplomacy between Washington and Tehran reduced fears of supply disruptions.
Treasury Secretary Scott Bessent said negotiations with Iran were progressing and suggested an agreement on reopening the Strait of Hormuz could come soon.
“We are in talks with the Iranians,” Bessent told CNBC’s “Squawk Box.” “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.”
Markets Extend Recent Gains
Wall Street finished Monday with another strong advance, extending its winning streak to a third consecutive session.
The Nasdaq rose 2.1% to 25,913.90, while the S&P 500 gained 1.5% to finish at 7,600.50. The Dow Jones Industrial Average added 1.3%, closing at 53,178.41.
Lower energy prices were the main driver after President Donald Trump announced that a planned military strike against Iran had been cancelled.
Trump Points to Potential Agreement
Trump said on Truth Social that discussions had reached a stage where military action was no longer necessary.
“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,” Trump said. “This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”
He added, “Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.”
Although Trump later suggested negotiations would begin immediately, Iranian officials rejected reports that direct talks had been arranged.
Airlines, Software and Retail Stocks Lead Rally
Airline shares benefited from lower fuel costs, sending the NYSE Arca Airline Index up 4.9%.
Software companies also enjoyed strong gains, with the Dow Jones U.S. Software Index climbing 4.1% to its highest close in two months.
Retail stocks extended their recent advance, while housing, gold and telecommunications sectors also moved higher. Pharmaceutical shares were among the weakest performers.
Manufacturing Activity Surprises to the Upside
Fresh data from the Institute for Supply Management added to the positive mood.
The U.S. Manufacturing PMI increased to 55.6 in July from 53.3 in June, comfortably ahead of economists’ forecasts of 54.0 and marking the highest reading since May 2022.
Leave a Reply