U.S. stock futures moved higher on Tuesday as investors balanced ongoing uncertainty surrounding relations between the United States and Iran with another busy day of corporate earnings. Optimism over potential diplomatic progress in the Middle East continued to support markets, although conflicting statements from Washington and Tehran kept hopes of a swift agreement in check. Meanwhile, Palantir (NASDAQ:PLTR) and Snap (NYSE:SNAP) surged in after-hours trading after both companies delivered stronger-than-expected quarterly results.
Futures Signal Another Positive Session
Futures linked to the major U.S. equity indices pointed to additional gains as traders monitored geopolitical headlines alongside fresh earnings releases.
At 03:03 ET (07:03 GMT), Dow Jones futures were higher by 111 points, or 0.2%, S&P 500 futures gained 19 points, or 0.3%, and Nasdaq 100 futures advanced 201 points, or 0.7%.
The major U.S. indices closed higher on Monday after President Donald Trump chose not to authorise additional military strikes against Iran over the weekend. Reports that negotiations concerning the Strait of Hormuz could resume also encouraged investors, although Iranian officials later denied that any discussions were taking place.
Economic indicators added to the positive mood after U.S. manufacturing activity accelerated in July, supported by continued investment in artificial intelligence infrastructure. Strong earnings from Microsoft and Amazon further strengthened confidence in the AI sector, although investors remain cautious about how quickly heavy spending on data centres and advanced chips will translate into sustainable profitability.
Meanwhile, U.S. Treasury yields declined following signs of easing tensions in the Middle East and reports that the United States and Japan had coordinated currency market intervention to strengthen the yen. Bond yields generally move in the opposite direction to prices.
Mixed Signals Keep Iran Talks in Focus
Developments surrounding the conflict with Iran continue to dominate investor attention, but contradictory statements from both governments have made the diplomatic outlook increasingly difficult to assess.
President Trump said earlier this week that negotiations with Iran had resumed, describing them as the “last chance” for Tehran to “sign a good document.”
However, Iranian Foreign Ministry spokesperson Esmail Baghaei stated that no ceasefire discussions had been scheduled.
Investors have repeatedly faced alternating periods of escalating tensions and diplomatic optimism, while shipping through the Strait of Hormuz has remained heavily disrupted. The strategic route continues to face significant restrictions despite intermittent efforts to restart negotiations.
Oil prices have remained highly volatile throughout the conflict. On Tuesday, Brent crude futures rose 1.3% to $84.85 per barrel after climbing close to $100 per barrel last month. Before hostilities began, Brent was trading at around $70 per barrel.
Palantir Delivers Strong Growth and Raises Guidance
Palantir (NASDAQ:PLTR) climbed more than 15% after the closing bell after reporting robust second-quarter earnings and increasing its outlook for the full year.
Chief Executive Alex Karp said customers are relying on Palantir to provide them with “maximal control over their operations, data and decisions,” adding that “demand for AI sovereignty has been unleashed.”
Revenue almost doubled year over year to $1.94 billion, a performance Karp described as “otherworldly.” The company now forecasts annual revenue of up to $8.16 billion, compared with previous guidance of just under $7.7 billion.
Palantir’s Maven AI platform, which analyses military intelligence and supports battlefield targeting, has continued to strengthen its relationship with U.S. government agencies.
Even so, analysts have warned that lower-cost AI solutions from companies such as Anthropic could increase competitive pressure. Earlier this year, Palantir executives criticised what they referred to as “AI slop” produced by rival frontier AI developers.
Snap Posts Better Results
Snap (NYSE:SNAP) also gained more than 7% in after-hours trading after posting stronger quarterly figures.
The company reduced its second-quarter net loss to $164 million from $262.6 million a year earlier, helped by ongoing cost-saving measures. Snap has continued expanding the use of artificial intelligence across its business and previously announced plans to reduce its workforce by roughly 16%.
Revenue increased 19% to $1.6 billion, driven by stronger advertising demand across products including Sponsored Snaps. Advertising revenue rose 9% to $1.28 billion, while other revenue streams, including premium subscriptions, increased 85% to $316 million.
White House to Review AI Policy Framework
The Trump administration is expected to host executives from leading artificial intelligence companies at the White House on Tuesday, according to The Information.
People familiar with the plans said officials will examine a proposed framework for AI regulation during the meeting.
Representatives from OpenAI, Google and Anthropic are expected to attend, with the Office of the National Cyber Director organising the event.
It remains uncertain whether officials will seek industry feedback or present a completed regulatory framework.
