Dow hit record highs on strong AI-linked earnings and hopes for an Iran war deal

The Dow and S&P 500 hit record highs on Tuesday as strong results from AI-linked companies and hopes for an Iran deal boosted sentiment. Caterpillar rose 5.8% after raising its annual revenue growth forecast, while Palantir jumped 26% again by lifting its annual revenue outlook. Investors focused on whether heavy AI spending is translating into sustainable returns following a choppy July; Microsoft and Amazon’s solid results last week helped support the rally. Chips also climbed, with the Philadelphia Semiconductor index up around 5.8%. In geopolitics, crude fell about 4% after comments from a Qatari official and U.S. Treasury Secretary Scott Bessent on potential talks. At 11:37 a.m. ET, the Dow rose 768.56 points, or 1.44%, to 53,946.83, and the S&P 500 gained 1.29% to 7,698.74.