Key facts
- US stock markets reached record highs on Tuesday.
- The S&P 500 and Dow Jones Industrial Average hit intraday and closing record highs.
- Strong AI-related earnings boosted US stock markets.
- Hopes for a Middle East diplomatic resolution eased geopolitical concerns.
- Oil prices fell sharply due to easing geopolitical concerns.
- European stocks, including the STOXX 600, closed at a record high.
- Technology sector advances drove European stock gains.
- Global hedge funds lost nearly 3% of their gains in July.
- Hedge funds remain up approximately 8% for the year.
- DuPont raised its annual profit forecast after beating quarterly estimates.
- Seoul shares closed higher on Tuesday.
- Gains in Seoul were capped by AI and Middle East crisis uncertainty.
US stock markets, specifically the S&P 500 and Dow Jones Industrial Average, achieved intraday and closing record highs on Tuesday. These gains were primarily driven by robust corporate earnings, particularly from companies involved in artificial intelligence (AI) and heavy equipment sectors, such as Caterpillar and Palantir. Hopes for a diplomatic resolution in the Middle East, potentially leading to the reopening of the Strait of Hormuz, also contributed to market optimism and a significant drop in oil prices. The Nasdaq Composite also saw substantial gains.
In Europe, the STOXX 600 index closed at a record high, propelled by advances in the technology sector and positive corporate earnings reports. Companies like Bayer and BE Semiconductor were among the gainers, while Lufthansa and Zalando experienced notable declines. Meanwhile, Seoul shares ended higher after a sharp previous decline, with retail investors driving the gains. However, ongoing uncertainty surrounding artificial intelligence and the Middle East crisis capped the upward movement, despite positive performance on Wall Street.
In contrast to the broader market gains, global hedge funds saw their year-to-date profits dented in July. According to JPMorgan, hedge funds lost nearly 3% of their gains for the month due to the unwinding of crowded tech-related trades and momentum trades. Despite this July setback, hedge funds remain up approximately 8% for the year across all strategies.
Further contributing to the positive corporate outlook, DuPont raised its annual profit forecast after surpassing second-quarter earnings estimates. This upward revision was attributed to price hikes and capital deployment measures. The company anticipates mid-single-digit organic sales growth in the latter half of the year.