The S&P 500 and the Dow Jones Industrial Average hit record highs on Tuesday amid news of a deal to reopen the Strait of Hormuz and strong earnings reports from companies.
Investopedia reported, “The tech-focused Nasdaq Composite, benchmark S&P 500, and blue-chip Dow surged a respective 2.6%, 1.8%, and 1.7%. The Dow added more than 900 points to notch its second closing high this week.”
The S&P closed above 7,700 for the first time, and the Dow Jones ended the day at 54,086.88.
Software maker Palantir reported better-than-expected earnings and lifted its outlook for the quarters ahead, causing the stock to surge nearly 30 percent, leading the way for the S&P 500 and Nasdaq, according to Investopedia.
Blue-chip companies Caterpillar and McDonald’s rose 5.5 percent and 1 percent, respectively, boosting the Dow Jones.
CNBC reported Wednesday that the S&P and the Dow Jones rose to new all-time highs as markets opened.
“Dow member Disney rose more than 4% on better-than-expected earnings for its fiscal third quarter. Additionally, Eli Lilly shares moved higher by 5% after its second-quarter earnings and revenue surpassed estimates,” the news outlet said.
Are you surprised that the predictions of financial ruin if we dealt with Iran were wrong?
“Meanwhile, oil prices remained stable Wednesday after falling Tuesday, when Treasury Secretary Scott Bessent said that the U.S. and Iran could be closing in on a deal to reopen the Strait of Hormuz. West Texas Intermediate futures for September delivery were little changed at around $75 per barrel. Brent crude futures for October delivery, the international benchmark, were up 1% at about $80 a barrel,” CNBC added.
Brent crude oil was at approximately $70 per barrel before Operation Epic Fury targeting Iran began in February of this year, and gasoline averaged about $3.00 per gallon nationally and spiked to $4.50 per gallon in May, according to The New York Times.
Gas prices are currently at $4.08, according to AAA.
President Donald Trump told Fox News on Tuesday night that if the Strait of Hormuz can remain open, he predicts that gasoline will fall to $2.50 per gallon, given the increased supply that will hit the market.
“Now you take a look, with [the Iran conflict] going on… we hit an all-time stock market high. 401ks are the highest they’ve ever been by double and triple. And then I read we’re doing badly on the economy,” he said.
“By the way, job numbers: we have more people working in the United States today than ever in history,” he added. “We’re doing an unbelievable job.”
🚨 IT’S OFFICIAL: President Trump is now expecting gas to plummet toward $2.50 per gallon if a deal is struck with Iran
“If we have no friction, I think it’ll go down to $2.50 per gallon. It was $1.85 before I made this little journey to the Islamic Republic of Iran. I had to… pic.twitter.com/uG74ikKQpM
— Eric Daugherty (@EricLDaugh) August 5, 2026
The Atlanta Federal Reserve is forecasting that the Gross Domestic Product for the third quarter ending Sept. 30 will grow by 5.9 percent.
On August 4, the #GDPNow model nowcast of real GDP growth in Q3 2026 is 5.9%: https://t.co/T7FoDdgYos. #ATLFedResearch
Download our EconomyNow app or go to our website for the latest GDPNow nowcast: https://t.co/JPMzsC5TNo. pic.twitter.com/lfyQTtwN13
— Atlanta Fed (@AtlantaFed) August 4, 2026
That figure is reminiscent of the growth the U.S. economy experienced following the Ronald Reagan tax cuts of 1981, when GDP increased at a 7.6 percent pace in the third quarter of 1983.
The GDP grew at 2.3 percent during President Joe Biden’s last quarter in office in 2024, down from 2.8 percent the quarter before.
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