US stocks rallied to all-time highs on Tuesday 4 August 2026, propelled by better-than-expected corporate earnings led by artificial intelligence-linked companies and a sharp drop in oil prices (The Guardian).

The S&P 500 rose 136.02 points, or 1.8%, to close at 7,736.52, surpassing its prior all-time high. The Dow Jones Industrial Average added 907.47 points, or 1.7%, closing at 54,085.88, a record set the day after its previous one. The Nasdaq composite jumped 671.10 points, or 2.6%, to finish at 26,584.99 (The Guardian). Reuters independently confirmed that the S&P 500 and Dow struck record highs after strong forecasts from Caterpillar and Palantir (Reuters). CNN reported the S&P 500 surpassed 7,700 in intraday trading, an intraday record (CNN).

Palantir Technologies surged 29.5% after CEO Alex Karp said overall revenue leaped 93% in what he called an "otherworldly" quarter. The company also raised its full-year 2026 revenue forecast following stronger-than-expected spring profit (The Guardian). Caterpillar climbed 5.6% after posting profit and revenue that exceeded expectations, marking its first quarter with over $20 billion in sales and revenue. Caterpillar's results were lifted in part by increased orders for turbines used to power datacenters, tying the industrial heavyweight directly to the AI infrastructure buildout (The Guardian).

Semiconductor and AI-adjacent names were among the strongest forces lifting the S&P 500. Nvidia gained 2.6%, Broadcom rose 6.6%, and Micron Technology advanced 7.6% (The Guardian). The breadth of AI-driven gains, spanning software, semiconductors, and industrial equipment, suggests the earnings momentum is propagating across multiple layers of the AI value chain rather than concentrating in a single bellwether.

S&P 500 companies were on track to deliver nearly 50% earnings-per-share growth for the spring of 2026 compared with a year earlier, according to FactSet, the biggest such jump since 2021 (The Guardian). That figure provides context for the rally's magnitude: the index has advanced from its first close above 7,000 on 15 April 2026 to records near 7,737 in under four months, a trajectory punctuated by volatility tied to oil and geopolitical risk. In late July, the S&P 500 had fallen 1.5% in a single session while the Dow dropped more than 1,000 points (AP), and Brent crude swung between $72 and $102 per barrel through July on uncertainty about when the conflict with Iran would allow oil tankers to exit the Persian Gulf (The Guardian).

On 4 August, Brent crude fell 5.3% to $79.36 per barrel (The Guardian). Reuters attributed the S&P 500's record close to strong AI-linked earnings and hopes of a Mideast deal (Reuters). CNN similarly reported that falling oil prices helped ease investor nerves (CNN). The 10-year US Treasury yield fell to 4.62% on 4 August, down from 4.70% on Monday and 4.75% at the end of the prior week, easing pressure on equity valuations (The Guardian).

Not every stock participated. Chipotle Mexican Group fell 9.7% on fears that future profits could be hurt after it removed jalapeños from some restaurants following a salmonella outbreak (The Guardian).

The rally on 4 August built on gains from the prior session. On 2 August, the Dow jumped 693.38 points, or 1.32%, to close at 53,178.41, while the S&P 500 gained 1.48% to close at 7,600.50 (CNBC). AP had reported that S&P 500 close as 110.78 points, or 1.5%, just 0.1% below its record set earlier that summer (AP). The index then broke through decisively on 4 August.

The convergence of three simultaneous tailwinds is what made Tuesday's session notable: corporate earnings growth at its strongest clip in five years, a meaningful retreat in energy prices from a conflict-driven summer range, and a steady decline in benchmark Treasury yields. Each of these factors has moved independently in recent months, and the late-July sell-off illustrated how quickly they can reverse when oil spikes. The durability of the record highs will likely depend on whether the geopolitical risk premium in crude continues to unwind or reasserts itself, and whether AI-linked revenue growth, now spreading from software to semiconductors to industrial equipment, can sustain the earnings trajectory that equity valuations at these levels imply.