U.S. stock index futures traded higher on Tuesday, indicating Wall Street could build on the strong gains recorded over the past several trading sessions.
Technology stocks looked set to lead the advance, with Nasdaq 100 futures climbing 1.1% ahead of the opening bell.
Palantir Leads Premarket Gains
Palantir (NASDAQ:PLTR) surged more than 15% in pre-market trading after the software company reported second-quarter results that comfortably exceeded expectations and increased its full-year financial guidance.
“This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%,” said Palantir Co-Founder and CEO Alex Karp. “The sovereign AI revolution makes us very optimistic about the future.”
Falling Oil Prices Lift Market Sentiment
Lower crude oil prices also supported investor confidence.
U.S. crude futures fell more than 3% on Tuesday after tumbling by over 5% in the previous session, as hopes for renewed diplomacy between the United States and Iran eased concerns over global energy supplies.
Earlier in the day, oil prices had moved higher before reversing sharply after U.S. Treasury Secretary Scott Bessent suggested an agreement to reopen the Strait of Hormuz could be reached within days.
“We are in talks with the Iranians,” Bessent told CNBC’s “Squawk Box.” “There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.”
Wall Street Extends Its Rally
U.S. stocks ended Monday with another strong performance, building on gains from the previous two sessions.
The Nasdaq climbed 540.04 points, or 2.1%, to close at 25,913.90. The S&P 500 gained 110.78 points, or 1.5%, finishing at 7,600.50, while the Dow Jones Industrial Average rose 693.38 points, or 1.3%, to 53,178.41.
The rally was fuelled largely by the sharp decline in oil prices following signs that tensions in the Middle East could ease.
Trump Signals Possible Breakthrough
Oil prices came under pressure after President Donald Trump announced on Truth Social that he had cancelled a planned military strike against Iran.
“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,” Trump said. “This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”
He added, “Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.”
Trump later stated that negotiations between Washington and Tehran would begin on Monday afternoon, although Iranian officials denied that any direct talks were planned.
Airlines and Technology Stocks Outperform
Airline stocks posted some of the strongest gains as lower fuel costs improved the outlook for the sector, pushing the NYSE Arca Airline Index up 4.9%.
Software companies also outperformed, with the Dow Jones U.S. Software Index rising 4.1% to its highest closing level in two months.
Retail shares continued their recent rally, lifting the Dow Jones U.S. Retail Index 2.6% to its strongest finish in almost three months.
Housing, gold and telecommunications stocks also advanced, while pharmaceutical companies lagged behind, sending the NYSE Arca Pharmaceutical Index down 1.8%.
Manufacturing Data Strengthens Outlook
Fresh economic data also supported market sentiment.
The Institute for Supply Management reported that its U.S. Manufacturing PMI rose to 55.6 in July from 53.3 in June, comfortably beating economists’ expectations of 54.0.
The latest reading marked the strongest level for the index since May 2022, signalling continued expansion across the U.S. manufacturing sector.
Palantir Technologies stock price
