The S&P 500 rallied to a record high on Tuesday, led by a recovery in tech stocks and bolstered by signs that a peace deal between Iran and the United States might once again be in sight.
The benchmark index rose 1.8 percent, pushing past its previous peak at the start of June and capping a strong rebound that has lifted the index nearly 6 percent over the past week.
After a jittery response to last week’s comments from Kevin Warsh, the new Federal Reserve chairman, stocks have been lifted by the prospect of fewer immediate rate increases, strong financial results from some big technology companies, cooling tensions between Iran and the United States and a rare intervention in global markets by the Treasury Department that also helped prop up domestic markets.
Investors have latched onto comments from the Trump administration in recent days that Iran and Qatar were making progress in talks to reopen the straight of Hormuz, a vital oil shipping route, helping extend a turnaround in technology stocks that began last week.
Investors remain concerned, however, that artificial intelligence companies that have been spending hundreds of billions of dollars building out data centers may yet run into trouble, such as from less expensive models being developed primarily by China.
The S&P 500 has swung high and low over the past two months, at times rising on hopes that the conflict with Iran was nearing an end or because of strong earnings by a large A.I. company, only for negotiations between Tehran and Washington to fall apart, or for fears about tech overspending to re-emerge.
Last week, the Nasdaq Composite index, which includes big technology companies, came close to a correction, Wall Street’s term of a drop of 10 percent or more from its recent peak.
By the end of the week, investors’ fears began to ease and the market stirred to a rally again. The Nasdaq has risen more than 9 percent since last Wednesday.
Stocks have been supported by continued strong corporate earnings, with companies recently reporting financial results for the three months through June.
Eighty-six percent of the S&P 500 companies that have reported this earnings season have posted earnings-per-share results that beat analysts’ forecasts, as of Friday’s market close, according to FactSet.
In another move that helped ease the market’s jitters, the Treasury Department stepped in to stabilize Japan’s weakening currency.
The yen had fallen to a 40-year low of 164 per dollar in recent weeks, in part because of worries over the government’s spending plans. The currency’s drop was intensified by a rise in oil prices.
Japan is a large holder of Treasuries, and the risk of the Japanese government selling U.S. assets to support the yen had fanned concerns about the sustainability of the U.S. debt, too. Higher Treasury yields also risk destabilizing the A.I. trade. By helping with the intervention, the Treasury Department was able to limit the direct selling of U.S. assets.
On Tuesday, international oil prices fell below $80 a barrel for the first time in three weeks, as investors were hopeful that a lull in fighting in the Middle East would hold.
Gas prices fell 1 cent on Tuesday to a national average of $4.09 a gallon, according to the AAA motor club.
Secretary of State Marco Rubio expressed optimism about negotiations to reopen the Strait of Hormuz, a waterway through which a fifth of the world’s crude oil is normally shipped. There had been “progress in talks,” he said, “but not finality yet.”
Some analysts said that they expected the rally in stocks to continue.
“The excesses that defined the early summer have largely been unwound,” said Scott Rubner, a strategist at Citadel Securities.
At the same time, the broader economy remains solid, despite lingering inflation worries.
“For the first time in several months, we believe investors can spend less time focused on positioning and more time focused on fundamentals,” Mr. Rubner said.
