Iran, Oman near Hormuz shipping deal; SpaceX AI exclusive to Nvidia

The Dow Jones Industrial Average closed at a record high for the fifth consecutive session on August 5, 2026, as investors reacted to signs of progress in talks between Iran and Oman over the Strait of Hormuz. The S&P 500 snapped a four-day winning streak, while the Nasdaq Composite slipped less than 1%. Stock futures edged higher in after-hours trading.

The rally was fueled by reports that Iran and Oman are nearing the final stages of an agreement on commercial shipping in the strait, according to Reuters. The deal would give Tehran more control over vessels passing through the critical oil transit route. President Donald Trump said a U.S. agreement to reopen the strait "could happen" as soon as Wednesday or Thursday, extending a deadline that Treasury Secretary Scott Bessent had floated a day earlier, when he said an accord could land Tuesday or Wednesday. Both Brent and WTI crude futures declined as optimism spread through markets.

The developments matter because the Strait of Hormuz is a vital chokepoint for global oil shipments, and any resolution could ease supply concerns that have roiled energy markets. Meanwhile, Federal Reserve Governor Lisa Cook said in Anchorage, Alaska, that she is "prepared to act" on a rate hike, citing persistent inflation risks. Traders now price a 55% chance of a rate increase at the central bank's September meeting, according to the CME FedWatch tool.

In the technology sector, SpaceX shares tumbled 13.6% despite beating earnings expectations, as a sixfold surge in capital expenditures to $18.4 billion—mostly for AI—unnerved investors. CEO Elon Musk sought to reassure markets by forecasting $1 trillion in annual revenue by 2030, a year earlier than previously projected. Musk also declared that SpaceX would use only Nvidia processors for its AI infrastructure, sending Nvidia shares up more than 3%. In contrast, AMD stock fell 7% even after reporting strong second-quarter results and guiding for data center growth "well over 100%." CEO Lisa Su said she has "tremendous respect for Elon" and looks forward to a longer-term partnership.

Elsewhere, Meta rolled out Muse Code, its first coding agent, aiming to challenge Anthropic and OpenAI by competing on price rather than capabilities, according to AI chief Alexandr Wang. At Google, chief scientist Jeff Dean is departing after 27 years to start his own company, while DeepMind CEO Demis Hassabis transitions to a chairman role. Alphabet shares dropped about 4% as the company reported negative cash flow for the first time on record, with full-year capital expenditures forecast at up to $205 billion. In politics, Progressive Abdul El-Sayed defeated Rep. Haley Stevens in Michigan's Democratic Senate primary and will face Mike Rogers in November for a seat both parties view as must-win.

Investor Michael Burry, known for "The Big Short," warned in a Substack post on Tuesday that the market rally could end in a sharp sell-off reminiscent of the 1987 crash. He argued that the AI boom is fueled by potentially unsustainable financing arrangements and that declining volatility is encouraging systematic investors to increase exposure, creating a self-reinforcing cycle.