[New York Stocks] Hormuz May Reopen... Dow, S&P 500 Hit Record Highs

All Major International Oil Prices Plunge

SK hynix ADR Surges on "Overweight" Rating

Most Semiconductor Stocks Rise

On the 4th (local time), all three major indices on the New York Stock Exchange closed higher. Both the Dow Jones Industrial Average and the S&P 500 reached all-time highs. News suggesting that the United States and Iran are close to reaching an agreement regarding navigation rights through the Strait of Hormuz sent international oil prices lower, expanding investors’ risk appetite. As a result, technology stocks also broadly closed higher.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended at 54,085.88, up 907.47 points (1.71%) from the previous session. The large-cap-focused S&P 500 rose 136.02 points (1.79%) to 7,736.52, while the tech-heavy Nasdaq Index jumped 671.09 points (2.59%) to close at 26,584.99.

Inside the New York Stock Exchange. New York, USA – Photo by Yoonjoo Hwang

The market reacted strongly to expectations of the reopening of the Strait of Hormuz. Scott Bessent, U.S. Secretary of the Treasury, said in an interview with CNBC that, regarding passage through the Strait, "There is a possibility that the strait could be reopened either today or tomorrow and that an agreement could be reached allowing for a return to a more normal situation."

International oil prices fell sharply in response. On the New York Mercantile Exchange, September delivery West Texas Intermediate (WTI) crude futures settled at $75.77 per barrel, down 5.7% from the previous session. On the ICE Futures Exchange, October delivery Brent crude futures recorded $79.36 per barrel, down 5.3% compared to the previous session.

Tony Miano, of Wells Fargo Investment Institute, commented, "The market is reacting to the possibility that reopening the Strait of Hormuz could normalize global oil supply and help ease short-term energy price pressures," and added, "Declining oil prices could ease concerns about inflation."

According to data released on this day, U.S. job openings in June decreased by 178,000 from the previous month, totaling 7,359,000. This figure was in line with expectations and indicates that the labor market overall remains stable. However, some pointed out that attention should also be paid to the July ADP employment report scheduled for release this week.

Brett Kenwell of eToro said, "If extremely positive economic figures emerge, especially with inflation still at a high level, it could increase the likelihood of a rate hike in September. However, disappointing economic data combined with last week's lower-than-expected GDP growth would give the Federal Reserve more justification to keep interest rates on hold."

Semiconductor Sector Rises ... Robust 2Q Earnings Brighten Investor Sentiment

Semiconductor-related stocks showed signs of recovery after steep declines last month. Notable gains included Micron at 7.62%, Palantir at 29.45%, Intel at 10.84%, and AMD at 7.00%. Palantir surged as it raised its annual revenue outlook following its strong earnings results.

Caterpillar closed up 5.60%, supported by stronger-than-expected second-quarter earnings and an upward revision to its sales growth forecast. Caterpillar stated that nationwide construction of artificial intelligence (AI) data centers has driven robust demand for its equipment.

According to FactSet, over 84% of S&P 500 companies have beaten expectations during this earnings season. The strong performance by U.S. companies is seen as a key reason for the rebound in the stock market.

Thierry Wizman, global FX and rates strategist at Macquarie Group, said, "Looking at the stock market rally over the past three trading days, it doesn't seem like there's anything wrong. Even semiconductor manufacturers have recovered from July's steep plunge, allaying some analysts' concerns that certain AI hyperscalers were excessively draining cash flow through data center investments."

Meanwhile, the 30-year U.S. Treasury yield ended at 5.173%, down 5.6 basis points (1bp = 0.01 percentage point) from the previous session. The yield on the 2-year Treasury fell 6.2 basis points to 4.194%.

This content was produced with the assistance of AI translation services.