MPC Markets Morning Call — 5th August 2026: S&P 500 & Dow Surge to Record Highs on Hormuz Deal Hopes and AI Earnings Blitz

Wall Street on Tuesday closed at a record high for the first time since early June, extending a stellar start to August following a mostly negative July. The S&P 500 jumped 1.8% to 7,735.13, the Dow surged 1.7% to 54,085.94, and the Nasdaq Composite advanced 2.6% to 26,584.99. All three major indices had entered the session already riding momentum from last week’s strong Microsoft and Amazon earnings, and Tuesday’s combination of diplomatic optimism and robust results pushed them decisively through resistance.

The AI trade, which had suffered its worst month since the financial crisis in July — the Philadelphia Semiconductor Index lost a whopping 20.6% — came roaring back. Analysts pointed to the forced unwind of Situational Awareness, the hedge fund started by former OpenAI researcher Leopold Aschenbrenner, as both a catalyst for July’s weakness and the subsequent rebound. Citadel snapped up the fund’s entire AI-focused stock portfolio, and as Jones Trading’s Michael O’Rourke noted: “The combination of Situational Awareness selling its publicly traded portfolio to Citadel and well-received earnings from Microsoft and Amazon has created a buying panic throughout most AI-related companies.”

Palantir Technologies was the session’s standout, rocketing 29.5% after nearly doubling quarterly revenue to $1.93 billion and describing commercial demand for its AI analytics as “otherworldly.” Caterpillar added 5.6% after delivering its first-ever $20 billion revenue quarter, crushing EPS estimates ($8.17 vs $6.19 est.) with particular strength in data centre power equipment. Rising stocks outnumbered decliners by 2-to-1 on both the NYSE and Nasdaq.

Global Stock Indices Performance — 4 August 2026. The Nasdaq led with a 2.6% daily gain and 8.8% over 5 days; all major US and European indices posted strong advances.

Oil prices slumped for a second straight session on Tuesday, fuelled by fresh hopes for a diplomatic breakthrough in the Iran war. Brent crude fell 5.6% to $79.11 a barrel and WTI dropped 5.9% to $75.58, erasing much of the war premium that had been built into energy markets. US Treasury Secretary Scott Bessent told CNBC he believed Washington and Tehran were nearing an agreement, noting “there is a chance we may have a deal today or tomorrow” to open the Strait of Hormuz and “move towards a more normalised position in this conflict.”

Qatar confirmed that a push to forge a diplomatic resolution is ongoing, with draft language reportedly being circulated among negotiators. The Gulf state, which has served as a regional mediator between the US and Iran, said efforts are focused on de-escalation and the reopening of the strait. President Trump also discussed deescalation efforts with Qatar’s Emir, and Tehran is reportedly considering allowing European nations to remove mines from Hormuz. While no formal agreement to hold direct talks is in place, the momentum towards a short-term resolution is the strongest it has been since the conflict began.

Brent crude has fallen sharply from its recent peaks as diplomatic momentum builds towards reopening the Strait of Hormuz. Source: ICE via Bloomberg

The plunge in oil prices has significant implications for the inflation outlook and monetary policy. As Wells Fargo’s Tony Miano noted: “Lower oil prices can ease inflation concerns,” though he cautioned that broader prices could remain sticky in the near term. The 10-year US Treasury yield fell 6 basis points to 4.62%, reflecting the easing pressure. However, the Fed remains in a hawkish posture — last week’s 9-3 vote to hold rates was not necessarily a “dovish hold,” and rate futures are pointing to one fully-priced hike this year.

SpaceX reported sharply higher second-quarter revenue of $7.81 billion in its first post-IPO quarter, topping estimates by nearly 15%, as rapid growth in its Starlink satellite business and AI infrastructure operations offset continued heavy investment in Starship. However, shares fell approximately 6% after hours as investors looked past the revenue beat to $15.8 billion in quarterly AI capital expenditure, continued net losses, and a lack of forward guidance. The company also announced a partnership with NVIDIA to develop the Starmind AI1 satellite compute payload incorporating Rubin GPUs.

SpaceX shares rallied during Tuesday’s regular session before sinking approximately 10% after the bell on heavy AI spending concerns. The stock has erased more than $1 trillion from its post-IPO peak.

AMD delivered a top- and bottom-line beat, earning $1.66 per share (vs $1.60 est.) on revenue of $11.54 billion (vs $11.25 billion est.), with data centre revenue surging 107% year-on-year to $6.72 billion. The company guided Q3 revenue to approximately $13 billion, well above the $12.51 billion consensus, implying 41% year-on-year growth. CEO Lisa Su highlighted strong momentum from EPYC processors and Instinct GPU deployments scaling with major hyperscalers. Despite the beat, shares fell 7.6% after hours — unsurprising given AMD stock had already soared 142% year-to-date, making it one of the biggest beneficiaries of the AI trade in 2026.

Gold futures rose 1% to $4,132.50 an ounce as the precious metal continued to trade in its recent $4,000–$4,100 range, supported by falling oil prices easing inflation fears but capped by an uncertain rate outlook. Spot gold added 0.6% to $4,079.52. Platinum and palladium were the standout performers, each rallying approximately 7%. Copper gained 3.3% and silver rose 2.5%, while uranium continued its strong run with a 4.1% daily gain and 13.2% over five days.

US Treasury yields declined across the curve as the oil slump eased inflation expectations. The 10-year yield fell 6 basis points to 4.62%, while Japan’s 10-year yield spiked to 2.87% after a poor auction. In currencies, EUR/USD was little changed at $1.1532, while USD/JPY edged up 0.4% to 157.74. The Bloomberg Dollar Spot Index was flat. Bitcoin rose 0.6% to $64,138. Attention now turns to Friday’s July nonfarm payrolls, with LPL Financial’s Jeffrey Roach expecting payrolls to grow by just 75,000 along with an uptick in unemployment to 4.3%.

Commodities, Energy & FX Performance — 4 August 2026. Crude oil fell sharply (-5.5% daily, -10.9% over 5 days) while platinum, HLit and uranium led gains. AUD firmed modestly.