Stocks rose on Tuesday, fueled by strong quarterly results from companies such as Palantir Technologies and Caterpillar, as oil prices dropped amid optimism that a U.S.-Iran deal to reopen the Strait of Hormuz could be on the horizon.

The S&P 500 gained 0.8% and had hit a fresh all-time intraday high, while the Nasdaq Composite popped 1.4%, as Palantir rallied more than 21%. The Dow Jones Industrial Average climbed 616 points, or 1.2%, led by a 6% rise in Caterpillar. The 30-stock index also notched a new record high.

Palantir Technologies Inc. rose 17%. The surge was driven by the company's Q2 earnings release, which beat expectations on all metrics and included a significant upward revision to full-year guidance. Q2 revenue came in at $1.935 billion, up 93% year-over-year and well above the consensus estimate of $1.802 billion. Adjusted EPS of $0.41 exceeded the $0.35 estimate by 17%. U.S. commercial revenue surged 149% to $764 million, far surpassing the $716.4 million expected.