U.S. stock futures traded higher on Tuesday following a positive start to the week on Wall Street, as investors weighed ongoing uncertainty surrounding the Middle East against another wave of corporate earnings. Hopes that diplomacy could ease tensions between the United States and Iran continued to underpin sentiment, although conflicting messages from both governments left the prospect of a near-term agreement uncertain. Meanwhile, strong quarterly updates from Palantir (NASDAQ:PLTR) and Snap (NYSE:SNAP) sent both stocks sharply higher in after-hours trading.
U.S. Futures Extend Gains
Futures tied to the major U.S. indices pointed to another positive session as markets digested geopolitical developments alongside fresh earnings reports.
At 03:03 ET (07:03 GMT), Dow Jones futures were up 111 points, or 0.2%, S&P 500 futures added 19 points, or 0.3%, while Nasdaq 100 futures climbed 201 points, or 0.7%.
Wall Street finished Monday in positive territory after President Donald Trump decided against launching additional strikes on Iran over the weekend. Reports suggesting that discussions over reopening the Strait of Hormuz could resume also supported investor confidence, although Tehran later rejected claims that negotiations were taking place.
Economic data also contributed to the upbeat tone, with U.S. manufacturing activity accelerating in July as spending on artificial intelligence infrastructure remained robust. Strong earnings from technology giants including Microsoft and Amazon reinforced optimism surrounding AI investment, although investors continue to question when substantial spending on data centres and semiconductor infrastructure will begin producing consistent returns.
At the same time, U.S. Treasury yields eased following signs of reduced tensions in the Middle East and reports that Washington and Tokyo had coordinated foreign exchange intervention to support the Japanese yen. Bond yields generally move lower as prices rise.
Conflicting Messages Cloud Iran Negotiations
Markets remain focused on developments surrounding the conflict between Iran and the United States, but mixed statements from both sides have left the outlook increasingly uncertain.
President Trump stated earlier this week that talks with Iran had resumed, describing them as the “last chance” for Tehran to “sign a good document.”
However, Iranian Foreign Ministry spokesperson Esmail Baghaei insisted that no ceasefire meetings had been arranged.
Investors have spent months navigating repeated cycles of escalating rhetoric followed by periods of de-escalation. Throughout this period, the continued disruption to shipping through the Strait of Hormuz has remained a major concern, with the strategic waterway largely closed despite intermittent diplomatic efforts.
Oil markets have reacted sharply to each new development. On Tuesday, Brent crude futures were up 1.3% at $84.85 per barrel, after reaching close to $100 per barrel last month. Before the conflict began, prices had been trading near $70 per barrel.
Palantir Raises Outlook Following Exceptional Quarter
Palantir (NASDAQ:PLTR) surged more than 15% in extended trading after delivering stronger-than-expected second-quarter results and lifting its full-year financial guidance.
Chief Executive Alex Karp said customers are trusting Palantir to give them “maximal control over their operations, data and decisions,” adding that “demand for AI sovereignty has been unleashed.”
Quarterly revenue almost doubled year over year to $1.94 billion, a performance Karp described as “otherworldly.” The company now expects full-year revenue to reach as much as $8.16 billion, significantly above its previous guidance of just under $7.7 billion.
Its Maven AI platform, which processes battlefield intelligence and assists military targeting, has further strengthened the company’s relationship with U.S. government agencies.
Despite the strong performance, some analysts believe Palantir may eventually face greater competition from lower-cost AI software providers such as Anthropic. Earlier this year, company executives criticised what they described as “AI slop” coming from rival frontier AI laboratories.
Snap Shares Rally After Improving Results
Snap (NYSE:SNAP) also enjoyed a strong after-hours rally, with shares rising more than 7% following quarterly earnings that exceeded expectations.
The social media company reduced its second-quarter net loss to $164 million from $262.6 million a year earlier, helped by cost-cutting initiatives. Snap has been integrating artificial intelligence across its business and previously announced plans to reduce its workforce by approximately 16% as part of broader efficiency measures.
Revenue increased 19% to $1.6 billion, supported by stronger advertising demand across products such as Sponsored Snaps. Advertising revenue rose 9% to $1.28 billion, while other revenue streams, including premium subscription services, jumped 85% to $316 million.
White House to Meet with AI Industry Leaders
Separately, The Information reported that the White House is expected to host executives from leading artificial intelligence companies on Tuesday.
According to people familiar with the matter, officials will review a proposed framework governing AI oversight during the meeting.
Representatives from OpenAI, Google and Anthropic are expected to attend. The gathering will reportedly be organised by the Office of the National Cyber Director.
It remains unclear whether administration officials will seek feedback from participants or present a completed version of the proposed regulatory framework.