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Last updated: August 5, 2026, 2:31 AM ET

Global Markets Rally on Iran Deal Hopes, AI Enthusiasm

Global stocks climbed to a record high as investors renewed their bets on the artificial intelligence trade, driving gains in chipmakers. The S&P 500 rose 1.8 percent, surpassing its previous peak from early June and marking a significant turnaround from a recent sell-off in technology stocks. Australian stocks hit an intraday record, buoyed by easing concerns over the US-Iran conflict and positive domestic economic signals. Japanese stocks led by electronics, were higher, fueled by renewed hopes for a U.S.-Iran deal to reopen the Strait of Hormuz.

Commodities and Currencies React to Geopolitical Shifts and Economic Data

Gold rose for a third consecutive day, as the prospect of an interim deal to reopen the Strait of Hormuz eased concerns about inflation and reduced the likelihood of further Federal Reserve interest rate hikes. Gold futures in New York traded just shy of an all-time high, with investors awaiting a U.S. tariff decision and tracking efforts to reopen the Strait of Hormuz, which lifted demand for risk assets. Crude oil futures fell to a three-week low after Treasury Secretary Scott Bessent indicated the U.S. could be close to an agreement with Iran to reopen the Strait of Hormuz, while Qatar reported progress in related diplomatic efforts. Oil fell a third day on optimism that a deal could be reached to reopen the Strait of Hormuz, potentially freeing up Persian Gulf supplies. U.S. natural gas futures declined as cooler weather forecasts emerged while production and inventories remained high. Most emerging-market currencies gained, rebounding from an earlier selloff amid optimism that the U.S. and Iran are nearing a deal to restart peace talks. WSJ Dollar Index edged lower, down for five of the past six trading days.

Corporate Earnings and Dealmaking Reflect Sector Trends

Infineon Technologies expects revenue of approximately €16.3 billion for the current fiscal year, driven by strong demand for semiconductors to build AI infrastructure. Heineken maintained its earnings outlook for the year after experiencing accelerated volume growth in the second quarter, supported by premium and lower-alcohol products. Cathay Pacific reported a significant increase in first-half profit, benefiting from higher passenger and cargo traffic despite elevated fuel prices. Wynn Resorts' second-quarter profit reached $140.1 million, a substantial increase from $66.2 million in the prior year, driven by demand from affluent customers. Kimberly-Clark reported a decline in second-quarter profit and missed revenue estimates due to social media disruptions in China concerning diaper quality. Merck lowered its full-year profit forecast due to costs associated with its acquisition of cancer biotech firm Terns Pharmaceuticals.

Asset Managers and IPOs See Shifting Investor Interest

Allianz Global Investors has agreed to acquire the asset management division of Singapore’s United Overseas Bank Ltd. to bolster its presence in Southeast Asia. OFB Tech Pvt, the operator of the OfBusiness technology supply chain and financing platform, is exploring the revival of its initial public offering plans, which could raise as much as $800 million. Mitsubishi UBE Cement Corp. is planning to go public as early as December, approximately five years after its formation through the consolidation of units from Japanese materials companies. India has increased the size of its share sale in state-run insurance giant LIC to $3.3 billion, driven by strong investor demand and oversubscription of the initial offering. Manipal Health Enterprises Ltd. is set for a subdued debut on the Mumbai stock exchange following its $960 million initial public offering, as gray market trading suggests cooling investor sentiment. Attovia Therapeutics Inc. an early-stage drug developer, successfully raised $289 million in a U.S. initial public offering, with its shares priced at the upper end of its marketed range.

Automotive and Technology Sectors Navigate Challenges and Opportunities

General Motors and China's SAIC plan to extend their joint venture partnership for an additional 20 years, with the aim of launching at least 30 new-energy vehicles by 2030 and deploying China-developed technological solutions for the domestic market. European carmakers are turning to Chinese rivals to fill their factory production lines, reflecting the European industry's efforts to maintain operational viability. Lucid, the electric vehicle manufacturer, posted a wider second-quarter loss due to charges related to job cuts and ongoing struggles with competition and a general downturn in the EV market. The CEO of Lucid warned that the U.S. cannot remain isolated from Chinese EV competition and predicted an industry shakeout, announcing a $1.4 billion cost-cutting program.

AI and Tech Investments Continue Amidst Scrutiny

SpaceX spent $15.8 billion on AI projects in the second quarter and has no plans to reduce its investment, according to Elon Musk. SpaceX reported that its capital expenditures more than quadrupled year-over-year, with revenue also experiencing growth. Despite strong revenue growth driven by cloud and Starlink demand, SpaceX's shares declined as investors reacted to Elon Musk's commitment to Nvidia chips for SpaceX, impacting AMD's stock. The operator of technology supply chain and financing platform OfBusiness is reportedly considering reviving plans for an initial public offering that could raise up to $800 million. The Chinese startup behind AI design agent Lovart is reportedly exploring an initial public offering in Hong Kong, becoming the latest firm to seek capital in the booming AI sector.

Financial Services and Real Estate Show Mixed Fortunes

Apollo Global Management is investing $1.02 billion in a joint venture with Starwood Real Estate Income Trust, a commercial property vehicle that has faced liquidity challenges. Apollo Global Management reported record fee-related revenue as it aims to become a leading lender on Wall Street. Prudential Financial Inc. beat Wall Street estimates in its second-quarter results, driven by a surge in revenue from its asset management division. Compass Inc. shares surged as much as 15% in post-market trading following the real estate services firm's announcement that cost savings from its acquisition of competitor Anywhere are progressing ahead of schedule. Tanger Inc. boosted its annual outlook for the second time this year, benefiting from increased domestic travel and early back-to-school shoppers boosting traffic and sales at its shopping centers.

Regulatory and Political Developments Shape Markets

The U.S. Treasury will likely need to increase the sizes of some of its fixed-rate borrowing programs next year but is not expected to signal this change immediately, according to bond dealers. Bond traders are spending millions of dollars to hedge against sharp declines in long-dated Treasuries, a strategy that risks triggering greater volatility in the $31 trillion market. UBS was fined $125 million for alleged anti-money laundering failures. The European Union is optimistic that winter liquefied natural gas imports will help replenish inventories, which are at their lowest level in nearly two decades for this time of year, exacerbated by the Iran conflict.

Other Notable Market Movements and Trends

The semiconductor index has entered a bear market, despite reporting "unprecedented" profit increases. Shares of SK Hynix Inc. advanced, supported by an overnight rally in U.S. chipmakers and speculation that the South Korean firm may soon announce buybacks and other shareholder return initiatives. The yen's recent strengthening is attributed to intervention, but a more sustainable reversal likely depends on the Bank of Japan accelerating its rate-hiking cycle. The U.S. trade deficit narrowed in June as both imports and exports declined, reversing from a busier May.