MARKET SNAPSHOT
U.S. stocks jumped and oil prices slid after Treasury Secretary Scott Bessent said a deal to open the Strait of Hormuz could be close. Treasury yields cooled amid a busy day of U.S. economic indicators and ahead of Friday's employment report from the Bureau of Labor Statistics. Gold prices edged higher and the dollar weakened slightly.
MARKET WRAPS EQUITIES
U.S. stocks surged after Treasury Secretary Scott Bessent said the U.S. could reach a deal with Iran to reopen the Strait of Hormuz "today or tomorrow."
The Dow Jones Industrial Average rose 1.7% to a fresh all-time high. The S&P 500 added 1.8%, to a record 7736.52, while the Nasdaq Composite advanced 2.6%.
Palantir surged almost 30% after the data-analytics company said its quarterly revenue nearly doubled and raised its outlook. CEO Alex Karp called the results "otherworldly" and said "demand for AI sovereignty has now been unleashed."
Earlier Tuesday, markets in Asia were mixed.
Japan's Nikkei 225 index climbed 0.3%. Toyota raised its annual earnings forecasts, citing a weaker yen and a smaller impact from the Iran war, and unveiled a more than $6 billion buyback as quarterly net profit rose sharply.
China's benchmark Shanghai Composite gained 0.3% while the Shenzhen Composite Index climbed 2.7%. The tech-focused ChiNext Price Index jumped 5.6%. Hong Kong's Hang Seng declined 0.6%.
Korea's memory chip-heavy Kospi gained 1.6%. South Korea's headline inflation moderated in July after reaching a 30-month high in June, partly because government measures helped restrain fuel and electricity prices.
Stocks in Australia advanced, as the S&P/ASX 200 gained 1.4%. New Zealand's S&P/NZX 50 Index added 0.9%.
COMMODITIES
Crude futures fell to a three-week low after Treasury Secretary Scott Bessent said the U.S. could be close to an agreement with Iran to reopen the Strait of Hormuz, while Qatar reported progress in diplomatic efforts.
"Today's negotiations are dealing solely with opening the Strait of Hormuz and getting barrels of oil moving from the Persian Gulf as fast as possible," Robert Yawger of Mizuho said. "I still expect a bad deal to ultimately get done, which will allow the U.S. to declare some kind of victory, but leave a lot of loose ends, including the nuclear deal."
WTI settled down 5.7% at $75.77 a barrel, and Brent fell 5.3% to $79.36--their lowest closes since July 10.
Gold futures finished higher for the day after the latest JOLTS report showed the number of job openings little changed in June.
Some analysts took this as a sign of a gradual weakening in the U.S. economy, potentially to the benefit of gold prices.
"This is not a recession siren, but it is a clear loss of economic horsepower--employers are becoming more cautious just as factory demand slips back into reverse," said Petros Pantzari of Monaxa.
Front-month gold closed up 1.5% to $4,095.40/oz, while silver settled up 4.1% to $60.056/oz.
TODAY'S TOP HEADLINES
Hormuz Opening Uncertain After New Strike
A new strike hit a ship moving through the Strait of Hormuz, and negotiations to reopen the waterway ran into a dispute over fees, clouding the outlook for the vital energy corridor even as the Trump administration insisted that a deal could be close.
U.S. Treasury Secretary Scott Bessent said in an interview Tuesday on CNBC that the U.S. and Iran could reach a deal by Wednesday to resolve the dispute in the strait, sending oil prices lower. Later, Secretary of State Marco Rubio said that talks to reopen the strait have made progress but hadn't reached a final agreement.
Earlier, the British navy's marine-traffic monitoring agency, UKMTO, reported that a cargo vessel had been hit by an unknown projectile off the coast of Oman early Tuesday. UKMTO didn't identify the ship or say who was responsible, but the incident provided a fresh reminder that commercial traffic remains vulnerable even as diplomats discuss reopening the route.
U.S. Trade Deficit Contracted in June
The U.S. trade deficit contracted in June, according to data published by the Commerce Department Tuesday.
U.S. imports totaled $388 billion in June, down 1.8% from May, while exports were $314.7 billion, down 0.9% from May.
That yielded a trade deficit of $73.3 billion versus $77.6 billion in May. Analysts polled by The Wall Street Journal were expecting a $72.9 billion monthly deficit.
Only the Bank of Japan Can Arrest the Yen's Decline
Japanese authorities have found themselves having to step into markets again and again to prop up the yen, this time with assistance from the U.S. government. To escape this "mowing the lawn" dilemma, the country, and specifically the Bank of Japan, has to address the root causes of yen weakness.
Viewed through one lens, the yen appears undervalued. Ask anyone who has traveled to Japan recently and they will rave about the bargains to be had. That is a stark shift from the era of yen overvaluation 15 years ago, when a dollar was worth about 80 yen and a trip to the country was a painful expense.
So why the continued yen selling pressure when a dollar buys twice as much of the Japanese currency? The answer appears to be a combination of fiscal and monetary concerns.
SpaceX Revenue Rises 92% in Second Quarter
SpaceX brought in $7.8 billion in revenue in the second quarter, up 92% from the same period last year. The company disclosed the figures Tuesday in its first earnings report as a public company.
SpaceX, which raised $86 billion in a record-setting initial public offering in June, reported a net loss of $541 million. Its capital expenditures hit $18.4 billion for the quarter.
After initially showing gains following the earnings report, SpaceX shares turned 4% lower in post-market trading.
Paramount's Streaming Growth Continues Amid Legal Challenges to Warner Deal
Paramount's streaming service continued to grow in the latest quarter, helping to narrowly offset another sales decline for its television unit.
The entertainment company, which owns CBS, Comedy Central, Nickelodeon and its namesake studio, also boosted its profit guidance for the year as it works to keep a lid on costs.
The results and updated guidance come as Paramount's $81 billion deal to buy Warner Bros. Discovery faces legal challenges.
AMD Shares Slip as Company Narrowly Beats Revenue Forecasts
Advanced Micro Devices reported $11.5 billion in revenue for the quarter ended June 27, narrowly beating analysts' expectations and the company's guidance. Shares fell 6% in after-hours trading.
Analysts polled by FactSet had expected quarterly revenue of $11.3 billion.
The chip maker reported its fifth consecutive quarter of record sales of its bread-and-butter processors as the rise of artificial-intelligence agents continues to drive an unprecedented wave of demand.
OpenAI Calls Apple's Trade-Secret Suit 'Careless' and 'Oddly Personal'
OpenAI swung back hard at Apple's allegations it stole trade secrets, saying that the iPhone maker was sloppy about securing files after employees left and denying that the employees it hired from Apple were involved in such theft.
In its most detailed comments to date on the litigation, the startup said in a blog post Monday evening that Apple misrepresented the companies' discussions from before Apple filed its July lawsuit.
"Apple is one of the greatest companies of all time, and built a reputation for obsessing over the smallest details. This careless, aggressive and oddly personal lawsuit sadly doesn't live up to that reputation," OpenAI said in the blog post, adding that the company has a "common issue" of failing to lock up files when employees departed.
Expected Major Events for Wednesday 00:30/JPN: Jul Japan Services PMI
00:30/HK: Jul Hong Kong Whole Economy PMI
00:30/SIN: Jul Singapore Whole Economy PMI
01:00/PHI: Jul CPI
01:45/CHN: Jul China Services PMI
02:00/AUS: Jul VFACTS vehicle sales
03:00/THA: Jul CPI
04:00/INA: 2Q GDP
05:00/SIN: Jun Retail Sales
06:00/JPN: Jun Revised Machine Tool Orders
08:20/TAI: Jul International Reserves
23:00/SKA: Jun Balance of payments
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