U.S.-Iran Deal Nears Agreement, Corporate Earnings Shine! Dow Futures Surge 600 Points

Major U.S. stock index futures rose on Tuesday (July 4), driven by better-than-expected earnings from Caterpillar (CAT-US) and Palantir Technologies (PLTR-US), along with U.S. Treasury Secretary Scott Bessent indicating that the U.S. and Iran may soon reach an agreement to reopen the Strait of Hormuz, restoring free passage for commercial vessels and de-escalating regional tensions—leading to a sharp drop in international oil prices.

At press time, Dow Jones Industrial Average futures were up 600 points, or 1.1%, primarily fueled by a pre-market surge of 9% in Caterpillar shares. S&P 500 futures gained 0.3%, while Nasdaq 100 futures jumped 1.1%. Palantir’s positive earnings report sent its stock soaring over 15% in pre-market trading, with Micron (MU-US) up 4% and Marvell Technology (MRVL-US) climbing 8%.

Bessent, speaking on CNBC’s 'Squawk Box,' said the U.S. is negotiating with Iran and could reach an agreement as early as Tuesday or Wednesday to reopen the Strait of Hormuz, restore freedom of navigation for commercial ships, and return the situation to a more normal state.

These comments eased market concerns over potential disruptions in oil supply. West Texas Intermediate (WTI) crude futures fell 4% to around $77 per barrel, while benchmark Brent crude futures dropped 3% to approximately $80 per barrel.

U.S. equities had already strengthened on Monday, with the Dow Jones closing at a record high. Amazon (AMZN-US) surpassed a $3 trillion market capitalization for the first time, while Nvidia (NVDA-US), Meta (META-US), Alphabet (GOOGL-US), and Microsoft (MSFT-US) also posted gains. After Monday’s rally, the S&P 500 is just 0.27% away from its intraday all-time peak, setting the stage for a potential new record on Tuesday.

On the corporate earnings front, Caterpillar exceeded expectations on both revenue and profit for the second quarter and raised its full-year revenue growth outlook, projecting that tariff-related costs will land at the lower end of its initial forecast range. Palantir also delivered significantly stronger-than-expected Q2 results, with CEO Alex Karp describing the performance as 'transcendent.' Commercial segment revenue surged 149% year-over-year to $764 million.

Jose Torres, senior economist at Interactive Brokers, noted that recent manufacturing and services data, along with insights from corporate earnings calls, have bolstered market confidence in companies’ ability to return capital to shareholders. He added that tech stocks, after experiencing a significant sell-off, now appear notably undervalued.

Investors on Tuesday will also monitor June factory orders and international trade data, as well as SpaceX’s (SPCX-US) first quarterly earnings report since going public. SpaceX shares rose 2% in pre-market trading.