August 4, 2026 | US Market Briefing: Oil Plunges 6%, S&P and Dow Hit Fresh Highs

The S&P 500 closed at 7,736.52 (+1.79%), the Dow Jones hit 54,085.88 (+1.71%)—both smashing records for a second straight day. The Nasdaq led the charge: 26,584.99 points and up 2.59%. Tech sector XLK surged an explosive 4.98% in one session, creating a clear scissors gap with the broader market.

This rally has two legs working together.

First, geopolitical risk premiums from the Strait of Hormuz evaporated fast. Iraqi tankers cleared safely; Oman just signed new navigation protocols. WTI crude crashed 6.36% to $75.23/barrel overnight—wiping out all that oil-price premium built up during the strait tensions. Energy sector XLE dipped -0.46%, utilities XLU fell -0.56%. Classic bleeders when risk appetite snaps back.

Second, AI earnings season is on fire. A near-5% single-day tech surge? That’s brutal in any market. AMD closed at $518.58 (+2.84%), with after-hours trading going wild over its results. SpaceX dropped its first-ever financials: stock jumped 6.82% to close at $125.33. The market is pricing Starlink’s cash flow story high—but the lockup expiry impact still looms ahead.

Separately, each leg makes sense; together they amplify everything: geopolitical easing → lower oil prices → softer inflation expectations → rates loosen up. The 10-year Treasury yield slipped to 4.63%, reducing valuation pressure on growth stocks. Capital now flows more aggressively into longer-duration tech assets. Materials sector XLB gained +1.94%—also riding the rate-relief wave.

Quick note on EA: Saudi consortium just closed a $55 billion acquisition deal. That’s beyond gaming industry scale anymore; Gulf capital is accelerating its shift from oil to entertainment-tech fast.

VIX ticked up slightly to 16.50 (+4.04%)—ironically rising even as S&P and Dow hit fresh highs. Probably the options market pricing in a dense earnings window ahead, with AMD’s after-hours action just one microcosm of that nervousness.

This rally isn’t pure hype—it has fundamentals backing it: strong AI earnings, cooling geopolitics, supportive rates. Looking forward, two variables matter most: if Hormuz stirs up again and pushes oil back up, or if future AI capex guidance misses expectations—both would crack the current logic. Keep an eye on this week’s remaining tech earnings reports and any new developments in strait navigation.