Wall Street Hits Record Highs on AI Optimism

Major US stock indices hit new record highs on Tuesday after strong earnings reports from companies involved in artificial intelligence boosted investor sentiment. Hopes for a diplomatic breakthrough in the Middle East also supported the rally.

The S&P 500 and the Dow Jones Industrial Average both advanced after Palantir raised its full-year revenue forecast. Caterpillar also projected stronger revenue growth, citing rising demand for equipment used in AI data centers.

Technology stocks received an additional boost from gains in semiconductor companies. Investors also continued to focus on the earnings season, during which about 85% of S&P 500 companies have so far reported results above analysts' expectations.

Oil prices fell on reports of ongoing negotiations aimed at ending the conflict in the Middle East. US Treasury Secretary Scott Bessent said an agreement with Iran to reopen the Strait of Hormuz could be reached as early as Tuesday or Wednesday.

Investor sentiment was also supported by reports that President Donald Trump's administration is preparing to ban imports of new Chinese-made components used in AI data centers, a move that lifted shares of several US technology companies.

(Reuters, bak)