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August 4, 2026 - 22:27
4 minutes
(Bloomberg) — Hopes for an agreement to revive the Strait of Hormuz lifted stocks to all-time highs, bonds climbed and oil sank, with Wall Street’s enthusiasm also fueled by a batch of solid corporate earnings.Both the S&P 500 and the Dow Jones Industrial Average rose to records. The Nasdaq 100 jumped 3.3%. Chipmakers saw their best four-day rally since 2020. In late hours, SpaceX reported strong revenue. Advanced Micro Devices Inc.’s outlook failed to inspire. Brent crude fell below $80.The prospect of an interim deal focused on the Strait of Hormuz appeared to be gaining traction, with Qatar saying a proposal had been drafted and both American and Iranian officials sounding hopeful about an agreement.President Donald Trump discussed efforts to deescalate US-Iran tensions with Qatar’s Emir Sheikh Tamim Bin Hamad Al-Thani, according to the Gulf state’s government. Tehran is considering allowing European nations to remove mines from Hormuz, said diplomats familiar with the matter.“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,” noted Tony Miano at Wells Fargo Investment Institute. “Lower oil prices can ease inflation concerns.”That said, inflation is unlikely to normalize overnight, Miano warned. Energy-related pressures may ease, but broader prices could remain sticky in the near term, limiting how far Treasury yields move lower, he concluded.While Federal Reserve policymakers last week left rates unchanged, more officials have expressed support for a hike as the Iran war and an AI investment boom fuel inflationary worries.On the economic front, US job openings eased in June but hiring picked up slightly, indicating relatively steady demand for workers heading into the summer.That stability gives the Fed room to stay focused on inflation, although Friday’s jobs report could quickly change the conversation, according to Bret Kenwell at eToro.“A red-hot print could strengthen the case for a September rate hike, particularly with inflation still elevated,” he said. “However, a disappointing report combined with last week’s weaker-than-expected gross domestic product growth could give the Fed more cover to remain on hold.”Corporate Highlights:Palantir Technologies Inc. soared after the company boosted full-year revenue and income forecasts, describing commercial demand for its data analytics tools as “otherworldly.” 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. Wayfair Inc. surged after the home furnishings retailer said sales in the US grew at their fastest clip since 2021, helped by a growing number of brick-and-mortar stores and demand for its higher-end brands. Jefferies Financial Group Inc. has been told that some of the invoices underpinning its financing to an iron ore trader called Sapphire Minmetals Corp. are not genuine, according to people familiar with the matter. Chipotle Mexican Grill Inc. removed jalapeños from multiple stores in Minnesota after learning the peppers may be linked to a salmonella outbreak in the state that’s sickened 110 people. What Bloomberg Strategists say…“Inflation is still the only part of the Fed mandate not being met. That puts renewed focus on this week’s US non-farm payrolls. If they are strong, it can help put renewed upward pressure on real yields.”—Edward Harrison, Macro Strategist, Markets Live. For the full analysis, click here.Some of the main moves in markets:StocksThe S&P 500 rose 1.8% as of 4 p.m. New York time The Nasdaq 100 rose 3.3% The Dow Jones Industrial Average rose 1.7% The MSCI World Index rose 1.5% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1532 The British pound rose 0.1% to $1.3452 The Japanese yen fell 0.4% to 157.74 per dollar CryptocurrenciesBitcoin rose 0.6% to $64,137.76 Ether rose 0.3% to $1,872.62 BondsThe yield on 10-year Treasuries declined six basis points to 4.62% Germany’s 10-year yield declined four basis points to 3.11% Britain’s 10-year yield declined six basis points to 4.90% CommoditiesWest Texas Intermediate crude fell 5.8% to $75.72 a barrel Spot gold rose 0.6% to $4,079.82 an ounce ©2026 Bloomberg L.P.
