The rally that ended July just kept going. On the first trading day of August, the Dow surged nearly 700 points to a fresh record and the Nasdaq jumped 2.1%, as the story that had rattled markets for weeks finally broke the right way: the US and Iran turned decisively toward diplomacy. President Trump said he had called off a planned strike to negotiate reopening the Strait of Hormuz, oil slid on the relief, and with the war premium draining away, Big Tech led a broad, powerful advance.
Market snapshot
| Instrument | Level | Move |
|---|---|---|
| US equities (Mon Aug 3 close) | ||
| Dow Jones | 53,178.41 | +1.32% · +693 pts · record |
| S&P 500 | 7,600.50 | +1.48% |
| Nasdaq Composite | 25,913.90 | +2.13% · Big Tech |
| Drivers & data | ||
| US-Iran | diplomacy | strike called off |
| ISM manufacturing | 55.6 | expansionary |
| Commodities & FX | ||
| Brent Crude | ≈ $83.62 | soft · Iran diplomacy |
| Gold (XAU/USD) | ≈ $4,052 | +0.24% |
| USD/JPY | 156.68 | yen rallies hard |
| EUR/USD | 1.1535 | firmer euro |
Index closes are for the Monday 3 August session. Oil has been soft since Friday on the US-Iran de-escalation; commodity and FX levels are verified on live price pages. Always check live prices with your broker.
Diplomacy breaks the tension
For most of July the market lived in fear of the Iran conflict spreading. On Monday that fear lifted in a single headline. President Trump said he had called off a planned attack on Iran to pursue a deal to reopen the Strait of Hormuz, posting "Get to work, everybody, and get it DONE." Regional allies, Saudi Arabia among them, had pushed Washington toward talks. Markets read it as the beginning of the end of the war premium, and the reaction was immediate: risk assets flew and oil fell. The de-escalation is the single thread tying the whole day together, cheaper oil, calmer nerves, and a green light for the stocks that had been held hostage to the conflict.
Live Brent crude chart (last three months). Prices shown are current, not the session covered above.
Big Tech does the heavy lifting
With the geopolitical weight lifted, the market's favourite trade took over. The Nasdaq's 2.13% gain outpaced the S&P's 1.48%, the signature of a day led by Big Tech, extending the momentum from Microsoft's and Amazon's blockbuster reports the week before. It was not just tech, though. ISM's manufacturing gauge rose to 55.6, its strongest reading since 2022 and well above the 54.0 economists expected, giving the rally an economic backbone rather than pure sentiment. The earnings machine also kept turning, with Palantir among the names reporting and a first-ever quarterly report from a newly public SpaceX on the calendar. The result was one of those broad, powerful up days where almost everything worked, and the Dow's near-700-point jump to a record was the exclamation mark.
Gold holds, and the yen keeps surging
The moves outside equities were telling too. Gold edged up about 0.24% to $4,052, holding its ground even on a risk-on day, which speaks to lingering inflation worries under the surface. The standout in currencies was the Japanese yen, which has rallied hard, with USD/JPY sliding to about 157, down from near 163 only a few sessions ago. That is a sharp move for a major currency in a short window, and it has been quietly reshaping the FX board while equities grabbed the headlines. The dollar was generally softer, with the euro firming toward 1.1535.
What it means for traders
Two forces are pulling in the same direction right now, and it is worth naming them. The first is de-escalation: as the Iran war premium drains out of oil, it takes inflation fear with it, which is broadly good for risk. The second is the Big Tech earnings wave, which has given the rally real substance rather than just relief. Together they have carried the indices to back-to-back records. But the same caution as last week applies: this all leads into Friday's jobs report, and with the Fed still hawkish and hike odds around 68%, a hot number could revive the rate fear that these gains have papered over. Watch the jobs print and whether the Iran talks actually hold, because a breakdown would snap the oil premium straight back. When a market is running this hot, the edge is process, not chasing: keep risk small per trade, size every position deliberately, and if you trade real size, know how the professionals manage risk into event weeks. You can read how July ended in Friday's wrap.
This market wrap is for information and education only and is not financial advice, a forecast, or a recommendation to buy or sell any instrument. Prices and percentage moves are approximate, sourced from public price pages and reports, and may be delayed or revised; single-stock moves cited are for context. Trading forex, CFDs and leveraged products carries a high level of risk and may not be suitable for all investors; you can lose more than your deposit. Always do your own research.