S&P 500 hits 25th record close of 2026 as earnings surge

The S&P 500 rose 1.9% on Tuesday, heading for its 25th record close of 2026, as corporate earnings surged and oil prices fell.

"With corporate profits up so much, while stock prices are still roughly where they were two months ago, stocks don't look as expensive as they did before," said Phil Segner, co-portfolio manager at the Leuthold Group.

Palantir Technologies soared 29.5% after CEO Alex Karp said revenue leaped 93% in what he called an "otherworldly" quarter. Caterpillar climbed 6.6% after posting its first quarter with more than $20 billion in sales. Companies in the S&P 500 are on track for nearly 50% earnings-per-share growth for the spring, the biggest jump since 2021, according to FactSet.

The return to record highs marks a full reversal of the momentum crash that began in late June, when the index went 42 days without a record finish — its longest stretch since a 53-day gap that ended April 16. With the S&P 500 still roughly where it was two months ago while profits have surged, the market's valuation has compressed, potentially attracting further inflows.

Earnings Power the Rally

Palantir and Caterpillar led the charge, but the rally was broad. Nvidia rose 2.9%, Broadcom gained 7.5%, and Micron Technology advanced 8.1% as semiconductor stocks strengthened. The Dow Jones Industrial Average added 1,009 points, or 1.9%, to its own record set the day before, while the Nasdaq composite climbed 2.6%.

The earnings surge follows strong results from Amazon, Microsoft and other megacap technology names earlier in the reporting season. Coming into this week, companies in the S&P 500 were on track to deliver growth of nearly 50% in earnings per share for the spring from a year earlier, according to FactSet — the biggest such jump since 2021, when the economy was roaring back to life after cratering in the COVID-19 pandemic.

Oil Slide Eases Inflation Pressure

Brent crude sank 5.4% to $79.25 per barrel as traders weighed the latest developments in the Iran conflict. The drop helped pull the 10-year Treasury yield down to 4.63% from 4.70% on Monday, easing pressure on the broader economy and on stock valuations. The yield remains well above its 3.97% level from before the war with Iran.

Oil had swung sharply between $72 and $102 per barrel through July on uncertainty about when the war with Iran would allow tankers to freely exit the Persian Gulf. The latest decline helped ease Wall Street's worries about inflation, which in turn relaxed pressure on the overall economy and on prices for stocks and other investments.

Economic data showed resilience, with U.S. employers advertising nearly 7.4 million job openings at the end of June, close to economists' expectations.

The S&P 500's 42-day gap between record finishes was its longest since a 53-day stretch that ended April 16, when the index completed what was, by one measure, its fastest V-shaped rebound in history. Tuesday's move suggests the correction has fully reversed, with the index now trading at levels that, relative to earnings, are more attractive than they were before the crash.

This article is for informational purposes only and does not constitute investment advice.