US stock indices closed higher on Tuesday amid growing optimism that the US and Iran could reach an agreement to reopen the Strait of Hormuz. The S&P 500 rose 1.8% to a record close of 7,736, while the Dow added 907 points to finish at an all-time high of 54,086. The Nasdaq 100 also gained 3.3%. Hopes for an interim agreement gained momentum after Qatar said a proposal had been drafted and US officials expressed optimism about the talks. Lower fuel and natural gas prices eased inflation concerns, helping Treasury yields extend their decline. Palantir soared 29.4% after raising its guidance on strong commercial sales, while Caterpillar gained 5.4% after beating earnings estimates. AI hyperscalers extended yesterday's gains, Alphabet and Microsoft advanced 1.1% each. Chipmakers rallied, with Broadcom up 6.6%, Micron rising 7.6%, and Intel advancing 10.8%. AMD (+7%) and SpaceX (+8.9%) closed higher ahead of their earnings releases.