US Treasury Secretary Scott Bessent stated on Tuesday that an agreement with Iran to reopen the Strait of Hormuz could be reached "today or tomorrow," triggering a broad rally in equity markets and a sharp decline in oil prices.

His comments came after investor confidence in the negotiation process had been tested by conflicting information and a fresh attack in the vital waterway.

Corporate earnings were the focal point of Tuesday's trading session. Strong results from Palantir and Caterpillar propelled the Nasdaq Composite and the Dow Jones Industrial Average each up more than 1.5%. Overseas, oil majors Saudi Aramco and BP benefited from the recent rise in crude prices.

After the closing bell, market attention will shift to the release of SpaceX's first quarterly report.

The Japanese yen weakened against the US dollar as the boost from the rare joint intervention by the US and Japan last week began to fade.