U.S. stocks climbed on Tuesday as oil prices retreated and investors parsed a new wave of corporate earnings, offering a measure of calm after recent market turbulence tied to Middle East tensions. The S&P 500 rose 0.6%, the Dow Jones Industrial Average added 0.5% and the Nasdaq Composite led gains with a 0.7% increase, as traders weighed a fragile U.S.-Iran truce alongside fresh company results.
Oil sold off from Monday’s spike after the ceasefire between U.S. and Iranian forces largely held, despite intermittent exchanges of fire as both sides jockeyed for control in the strategic Strait of Hormuz. Brent crude futures fell nearly 3% to about $111 a barrel, while West Texas Intermediate dropped more than 3% to trade below $103, easing a key source of geopolitical risk that had pressured markets.
Earnings season remains central to investor sentiment, with several high-profile reports due or released this week that could determine whether stocks sustain their rebound. Advanced Micro Devices is due to report on Tuesday and is being watched for signs about demand in the chip sector that underpins the AI expansion; Arm is scheduled to report on Wednesday. Traders have cited earnings growth so far this season as the main engine keeping the equity rally intact.
Corporate results on Tuesday provided a mixed picture. Anheuser-Busch InBev shares jumped after the beer maker topped estimates, while Ferrari posted an earnings beat and reaffirmed its guidance but nonetheless saw its stock fall in early trading. Also on the docket were reports from Shopify, Pfizer and Occidental, each closely monitored for clues on consumer spending, health-care demand and the energy patch respectively.
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The AI trade remains a double-edged sword for some companies. Palantir reported an 85% jump in first-quarter revenue, driven by surging sales to U.S. government and commercial clients, yet its shares slid after the results as investors questioned how AI tools will ultimately affect the firm’s software business and growth trajectory. The reaction underscored that strong top-line numbers still face scrutiny over sustainability and margins in an AI-driven market.
Macro data added to the backdrop: Commerce Department figures showed the U.S. trade deficit widened 4.4% to $60.3 billion, a development that could weigh on growth expectations. Markets are also awaiting the latest Job Openings and Labor Turnover Survey (JOLTS), which will provide additional insight into labor market strength and could influence Federal Reserve expectations.
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Investors face a balancing act between easing oil-related geopolitical risk and the forward guidance companies provide as earnings roll in. If corporate results continue to surprise to the upside, analysts say that could help extend the market’s recovery; conversely, renewed flare-ups in the Strait of Hormuz or disappointing outlooks could quickly reverse gains.
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