New york: US stocks climbed to record highs on Tuesday as optimism over a possible US-Iran agreement to reopen the Strait of Hormuz pushed oil prices lower, while strong corporate earnings boosted investor sentiment.

According to Anadolu Agency, the S and P 500 rose 0.5% to a fresh intraday record, while the Nasdaq Composite gained 0.9%. The Dow Jones Industrial Average surged more than 700 points, or 1.4%, also reaching an all-time high. US Treasury Secretary Scott Bessent announced that Washington was in discussions with Iran, indicating that an agreement to reopen the strategic waterway could be finalized on Tuesday or Wednesday.

"There is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict," Bessent stated in an interview with CNBC. His remarks led to a decline in oil prices, with West Texas Intermediate dropping about 5% to around $76 per barrel and Brent crude decreasing 4% to roughly $80.

Shares of Palantir Technologies surged more than 20% after the artificial intelligence software company reported strong second-quarter results and raised its full-year forecasts, despite facing criticism over its support for Israel's Gaza war. Caterpillar saw a 10% increase after exceeding quarterly expectations and enhancing its revenue growth guidance. Additionally, Micron Technology gained 4%, and Marvell Technology advanced by 11%.

The rally built on Monday's gains, when the Dow closed at a record high and Amazon's market capitalization exceeded $3 trillion for the first time.