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August 4, 2026 - 16:07
5 minutes
(Bloomberg) — Hopes for a deal to revive the Strait of Hormuz lifted stocks toward all-time highs, bonds rose and oil sank, with Wall Street’s enthusiasm also fueled by a batch of solid corporate earnings.Brent crude fell below $80 on optimism that mediators will be able to broker a deal and avoid major American airstrikes on Iran. The S&P 500 topped its June closing record. The Nasdaq 100 climbed 2% as Palantir Technologies Inc.’s outlook reassured investors about artificial-intelligence demand, with traders now gearing up for SpaceX and Advanced Micro Devices Inc.’s results.The prospect of a deal between the US and Iran appeared to be gaining traction, after Qatar said a proposal had been drafted and American Treasury Secretary Scott Bessent sounded hopeful on an agreement to reopen the Strait of Hormuz.“We’re in talks with the Iranians and I think there is a chance we may have a deal today or tomorrow to open the strait,” Bessent told CNBC. Asked whether there would be a toll on maritime traffic, he added: “I think it would be freedom of movement.”Visible flows through the waterway, which carried about a fifth of the world’s crude before the war, have slowed as attacks on vessels and Iranian threats heightened safety concerns for shipowners and crews. Oil prices have eased dramatically from last month’s peak, however, as President Donald Trump postponed new strikes on Iran to give talks more time.“Markets are reacting to the possibility that a reopening of the Strait of Hormuz could help normalize global oil supplies and reduce near-term energy price pressures,” said Tony Miano at Wells Fargo Investment Institute. “Lower oil prices can ease inflation concerns.”“That said, investors have seen similar headlines before,” Miano added. “Negotiations with Iran have historically been fragile, and a signed agreement would not necessarily translate into an immediate or sustained increase in oil flows.”As a result, inflation is unlikely to normalize overnight, he said. Energy-related pressures may ease, but broader inflation could remain sticky in the near term, limiting how far Treasury yields move lower, Miano concluded.Federal Reserve policymakers last week left their benchmark rate unchanged for the fifth consecutive meeting, but more officials have expressed support for a potential hike as tensions in the Middle East and an AI investment boom revive inflationary worries.On the economic front, data showed US job openings eased in June, indicating relatively steady demand for workers heading into the summer. The trade deficit narrowed as imports fell for the first time since the start of the year in a broad decline.Corporate Highlights:Anthropic PBC has struck a $10 billion deal for computing capacity from a months-old infrastructure startup, according to people familiar with the matter, marking the Claude maker’s latest effort to keep pace with demand for its products. Caterpillar Inc. crushed Wall Street’s second-quarter expectations and raised its sales outlook, easing concerns that demand for power-generation equipment used in data centers was beginning to cool. McDonald’s Corp. named a new US president to bring “focus and urgency” to its home market, after the fast-food chain posted its slowest growth in over a year. Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Spotify Technology SA, the world’s largest music streaming service, gave disappointing forecasts for active users and operating income in the third quarter. Some of the main moves in markets:StocksThe S&P 500 rose 0.9% as of 10:06 a.m. New York time The Nasdaq 100 rose 2% The Dow Jones Industrial Average rose 1.2% The Stoxx Europe 600 rose 0.8% The MSCI World Index rose 0.8% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1525 The British pound rose 0.1% to $1.3451 The Japanese yen fell 0.1% to 157.38 per dollar CryptocurrenciesBitcoin was little changed at $63,730.4 Ether fell 0.2% to $1,863.12 BondsThe yield on 10-year Treasuries declined four basis points to 4.64% Germany’s 10-year yield declined five basis points to 3.11% Britain’s 10-year yield declined four basis points to 4.92% CommoditiesWest Texas Intermediate crude fell 5.1% to $76.22 a barrel Spot gold rose 0.8% to $4,086.74 an ounce ©2026 Bloomberg L.P.
