Nasdaq Closes at Second Straight Record as Oil Slides and Trump Delays Iran Deal

The Nasdaq Composite (^IXIC) notched its second consecutive record close on Tuesday, gaining 0.4%, while the Dow Jones Industrial Average (^DJI) fell 0.3% and the S&P 500 (^GSPC) finished flat. The divergence caps a session driven by easing oil prices, fresh AI enthusiasm, and a queue of diplomatic events culminating in President Trump's meeting with Chinese leader Xi Jinping later this week.

Oil took center stage. Brent crude futures (BZ=F) and WTI crude futures (CL=F) fell roughly 3% intraday after reports, relayed by a senior Iranian government official to Kyodo News, that Iran would reopen the Strait of Hormuz within seven days if the US takes initial steps toward easing military pressure. Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies. Brent traded as low as $97 per barrel before recovering above $100 after Trump told the UN General Assembly that a US-Iran deal would come only after the November midterms. "I believe we'll make a deal right after the election, because it doesn't make sense for them not to," Trump said.

Oil's retreat helped cap long-dated Treasury yields and supported risk appetite across asset classes. Bitcoin (BTC-USD) held above $86,000 after jumping more than 5% on Friday and another 6% on Monday. "We believe crypto is in the early innings of a new bull market and we see few signs of overheating," Compass Point analyst Ed Engle wrote on Tuesday. Nicolai Sondergaard, senior research analyst at Nansen, said the move looks "like a combination of renewed ETF demand and a large short squeeze."

Meta remained the market's biggest single story. Its stock gained 11.3% to close at $741.25 on Monday, adding $192 billion in market cap and more than $13 billion to CEO Mark Zuckerberg's net worth, after the company's Muse AI agent app reached the top spot on Apple's App Store. Muse logged 2.8 million downloads in its first 12 days across US and Canada app stores, according to Sensor Tower — beating ChatGPT's 1.3 million over the same period. "Meta has a hit on its hands with Muse," Evercore ISI's Mark Mahaney wrote in a note. Meta shares rose another 1.5% Tuesday. The surge lifted the Roundhill Magnificent Seven ETF (MAGS) to an all-time high Monday, though Jefferies analysts cautioned that "earnings growth is expected to slow, free cash flow remains under pressure from record AI investment, and a growing pipeline of AI/Tech IPOs could create competition for capital."

Earnings drove sharp single-stock moves. AutoZone (AZO) jumped 5% after beating profit expectations while missing revenue forecasts, and said it expects sales to accelerate in 2027. Viking Therapeutics (VKTX) soared over 25% after its experimental obesity drug showed 22% weight loss in a clinical trial. SanDisk (SNDK) rose 5% after Rosenblatt Securities initiated coverage with a Buy rating and a $2,400 price target, versus the stock's $1,860 price. PayPal (PYPL) gained over 2% on a partnership letting Meta's Muse agents shop online. GameStop (GME) rose about 4% after CEO Ryan Cohen bought roughly 1.1 million shares for $26 million; the stock has climbed 30% over the past month after the company wiped out $1.4 billion in debt by paying bondholders in stock.

Ahead of the Trump-Xi summit, Treasury Secretary Scott Bessent called preliminary US-China talks "very successful." William Blair's Neal Dingmann warned rare earth investors to brace for swings, noting China accounted for 91% of global rare-earth magnet refining in 2024, according to JPMorgan. TD Cowen called the auto sector sell-off on Chinese car fears "overdone," saying a shift in US import policy at the summit is "very unlikely." The VanEck Rare Earth and Strategic Metals ETF (REMX) is down 13% over the past month.

On policy, Richmond Fed President Tom Barkin said stubborn inflation drove last week's rate hike and left the door open to more. "The 'passing' shocks aren't proving to be short-lived, or one-off events," Barkin said in a speech in Baltimore. Trump also floated a diesel export ban — "I've said let's not send out the diesel" — with Bessent examining feasibility. With a bilateral trade truce expiring in November and a Fed signaling openness to further hikes, the week's summits will set the tone for whether the AI-led rally broadens.