S&P 500 hits record high as Strait of Hormuz deal hopes rise

The S&P 500 surged 1.8 percent to a record close above 7,700 on August 4, 2026, topping its June 2 record of 7,620.90, driven by diplomatic headway on the Strait of Hormuz and robust earnings. The index has climbed 12.80 percent this year, outpacing its historical annual average of about 10.5 percent.

Dow Jones Industrial Average also set a record, climbing 1.7 percent to 54,085.88 for its second straight all-time high. Palantir Technologies shares skyrocketed 29.5 percent after the data analytics firm posted second-quarter revenue of $1.94 billion, handily beating forecasts.

Brent crude, the international benchmark, slid about 5 percent overnight to $79.11 per barrel as of 01:00 GMT on August 5, down 13 percent from a week earlier, as investors priced in a potential reopening of the Strait of Hormuz, a conduit for about one-fifth of global oil supplies before the war.

Diplomatic signals from both Washington and Tehran stoked the optimism. US Secretary of State Marco Rubio said on August 4 that he hoped an agreement would “happen very shortly,” while Treasury Secretary Scott Bessent told CNBC a deal could be clinched as soon as August 4 or 5. Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, described talks on safe shipping routes as “positive.”

Maritime traffic through the strait has been crippled since the US-Israel war on Iran started in late February. Only nine vessels transited the waterway on August 2, according to MarineTraffic, compared with roughly 130 daily crossings before the conflict.

US military said on August 4 that the strait was “free and open” and that US forces had helped more than 1,000 vessels transit despite Iranian aggression.

Asian markets tracked the rally on August 5 morning, with Japan’s Nikkei 225 up 3 percent and South Korea’s Kospi advancing 4.6 percent as of 01:00 GMT.