Global markets surged on Tuesday, pushing the Dow Jones and S&P 500 to historic peaks as investors responded to a wave of positive earnings reports. Much of the momentum was fueled by heavy hitters like Caterpillar and Palantir, both of which raised their annual revenue guidance, signaling robust health in the industrial and tech sectors. With over 80% of S&P 500 firms surpassing analyst expectations this quarter, market sentiment remains overwhelmingly bullish, bolstered further by a decline in oil prices that has helped alleviate inflationary fears.

While equities rallied, the Japanese yen saw a slight retreat, pulling back marginally after last week’s historic joint intervention by U.S. and Japanese authorities. Meanwhile, oil prices dropped significantly on growing hopes for a diplomatic breakthrough in the Iran conflict, which could potentially normalize transit through the Strait of Hormuz. This cooling in energy costs has shifted trader expectations regarding Federal Reserve policy, with many now betting that policymakers may hold interest rates steady in September. As Treasury yields ease, the broader financial landscape reflects a growing confidence that corporate resilience and diplomatic progress are guiding the economy toward a stable path.