Good morning! We thought Monday was a good day, but it had nothing on one of the biggest Tuesdays we've seen in a while. With multiple parts of the tech trade and the Iran situation showing green lights, we're back to record highs for the S&P 500 (^GSPC).

The S&P 500 gained 1.8% to close at 7,736.52 (wow) as the Nasdaq (^IXIC) gained 2.6% and the Dow (^DJI) 1.7%.

What we're watching Wednesday: A potential Iran deal and how investors respond to SpaceX results are at the top of our watchlist, but we've got many big corporate results as well: Walt Disney (DIS), Eli Lilly (LLY), Novo Nordisk (NVO), Western Digital (WDC), Sandisk (SNDK), Shopify (SHOP), Uber Technologies (UBER), CVS Health (CVS), eBay (EBAY), DoorDash (DASH), Block (XYZ), and more — a major survey of corporate America indeed.

Jobs week rolls on with ADP's private payrolls, expected to show continued strength in the labor market.

Yahoo Finance Morning Brief is written by Ethan Wolff-Mann.

See what else is trending on Yahoo Finance.

Palantir CEO Alex Karp visits "The Claman Countdown" at Fox Business Network Studios on July 27, 2026 in New York City. (John Lamparski/Getty Images)

Many companies contributed to the S&P 500's nearly 2% jump on Tuesday. After the hyperscalers got their round of applause on Monday, other parts of the AI trade seemed to fall into place. Chipmaker stocks rallied.

And Palantir (PLTR) jumped 29% (not a typo) after reporting what its CEO called an "otherworldly" quarter.

With this rally, the company is within shouting distance of where it began what has been a rough year as Palantir has been caught in the "SaaSpocalypse" that had investors wondering whether native AI products like Claude would simply obviate specialized software.

But investors read Tuesday's results from Palantir as an indication that the pie may be big enough for everyone to take a big slice — as bullish a piece of news as we've seen.

As Deutsche Bank wrote in a glowing note on Tuesday, "as much of application software is still trying to prove AI is truly incremental, Palantir increasingly looks like a time traveler, having already arrived in the AI future others are still aspiring towards."

It's possible that Palantir's positioning in the marketplace, helping the Feds and private sector implement AI, makes it unique. But the big question for markets is whether this might indicate that the reports of the death of software have been greatly exaggerated.

Treasury Secretary Scott Bessent, who hinted at good news. (Aaron Schwartz / AFP via Getty Images)

The stock market's sizable jump to record highs on Tuesday showed just what can happen when multiple key narratives of today's market all pull together in the same direction.

Palantir's reminder that the AI trade may, in fact, benefit software companies too — and the companies for which it works — formed another leg under the bull market's stool, along with the chip stocks' rising fortunes. (Strong compute demand is set to keep data center demand strong, which in turn will keep chip demand strong.)

But the backdrop mattered too. Much as investors may try to focus on AI and not the potential for Middle East quagmire, Tuesday's market action showed just how much pent-up anxiety over Iran still exists.

When Treasury Secretary Scott Bessent told CNBC that there's a chance of a deal "today or tomorrow," that glimmer of hope gave investors permission to dare to dream.

Not only would that dream include lower oil prices and uncertainty while raising stability and consumer spending power, but it would also mean that a challenged Fed might be able to successfully avoid a rate hike as the bond market calls its tough-talking bluff. (Treasurys rose and yields sank on Tuesday.)

But even if the market gets a deal, the fact that the first one didn't hold may mean investors reserve a more full-throated celebration (e.g., a massive rally) until they're convinced of its durability.

A mural of Elon Musk with the words ''Ad Astra'' can be seen on Boca Chica Blvd. next to SpaceX's South Texas facility in Cameron County, Texas, on July 22, 2026. (Reginald Mathalone/NurPhoto via Getty Images)

SpaceX had a very good day in the stock market, gaining 9.4% ahead of its first quarterly report as a public company.

But after that report, investors may take some of those gains back. 

By the numbers, the company beat analyst expectations, pulling in $7.8 billion versus $6.8 billion, and posting better-than-expected adjusted earnings.

SpaceX's valuation, as our Brian Sozzi noted using our AlphaSpace data, is very high, if you're going by the book.

But most investors are not going by any book, instead judging the company on how plausible its hopes and dreams are. 

With that in mind, does how the stock trades today matter that much? Are early-days results meaningful? One could argue no, depending on how investors react to the forward-looking statements Musk and co. utter.

What does matter, probably, is what happens on Thursday, Aug. 6, when a key lockup date ends and a huge amount of investors who own SpaceX stock will be able to dump it if they so choose.

(Win McNamee/Getty Images)

Nine Fed governors may have voted to keep interest rates where they are, but Chairman Kevin Warsh is getting quite a lot of grief for it.

The markets, certainly, made their feelings clear as the chair spoke, and the "credibility issue" has been at the forefront of much of the commentary. But a client note from Bank of America's economics team lays bare just how much damage Warsh did to his reputation.

"We don't think the Fed can get markets to do its work indefinitely by just talking tough," the team, led by Aditya Bhave, wrote. "It has to eventually walk the talk, or risk losing credibility."

Bhave and co. noted that Warsh was "all hat, no cattle."

Sidestepping questions, looking at alternative inflation measures, and looking to markets to tighten themselves do not invite confidence that the Fed will spring into action, the BofA team noted.

With yields down on Tuesday as Treasurys roared back amid hopes of an Iran deal, some pressure may come off the Fed. But its credibility problems remain.