Wall Street Parties While Indonesia Anxiously Awaits Economic Growth Data

A number of blue chip stocks helped prop up the index, with PT Telkom Indonesia (Persero) Tbk (TLKM) rising 1.82%, PT Astra International Tbk (ASII) strengthening 1.49%, and PT United Tractors Tbk (UNTR) gaining 0.84%.

On Wall Street, US markets celebrated on Tuesday, or early Wednesday Indonesian time. The S&P 500 and Dow Jones Industrial Average surged to new record highs. The rally was fuelled by strong corporate earnings and a drop in oil prices, driven by growing hopes that the Strait of Hormuz could be reopened.

The S&P 500 jumped 1.79% to close at a new record of 7,736.52, its first record since June 2026. The Nasdaq Composite soared 2.59% to 26,584.99, boosted by a 29% surge in Palantir Technologies shares. The Dow Jones Industrial Average rocketed 907.47 points, or 1.71%, to 54,085.88, led by Caterpillar, which jumped more than 5% and surpassed the intraday record set last month. Both the S&P 500 and Dow Jones also posted all-time closing highs.

While the technology sector led gains with a 4% surge, the rally was broad-based. The financial sector rose 0.9%, led by Goldman Sachs, while industrial and material sectors each gained nearly 2%.

Oil prices tumbled after US Treasury Secretary Scott Bessent told CNBC International that the US government was in discussions with Iran. “We are in discussions with the Iranians. There is a possibility of a deal today or tomorrow to reopen the strait and move towards a more normalised state of conflict,” Bessent said. West Texas Intermediate (WTI) crude futures closed down 5.69% at US$75.77 per barrel, while Brent crude, the international benchmark, fell 5.26% to US$79.36 per barrel.

Palantir shares recorded their best daily gain in more than two years after the company reported second-quarter results that far exceeded expectations. CEO Alex Karp described the performance as outstanding, driven by high demand related to AI sovereignty. Chip stocks also continued their recovery from the July sell-off, with Micron Technology surging more than 7% and Marvell Technology soaring nearly 13%.

Caterpillar was the top contributor to the Dow’s gains after reporting better-than-expected second-quarter profits and raising its revenue growth forecast. The company cited strong demand for heavy equipment driven by massive AI data centre construction in the United States. Caterpillar also expects the full-year impact of tariffs to be at the lower end of its previous projections.

The current earnings season has been remarkably strong. According to FactSet, more than 84% of S&P 500 companies that have reported results have beaten analyst expectations.

“Looking at the market’s surge over the last three sessions, you wouldn’t think there were any problems in the world right now,” said Thierry Wizman, Global FX & Rates Strategist at Macquarie Group. He added that semiconductor stocks have recovered from intense pressure in July after several giant AI companies managed to ease investor concerns that massive data centre spending would erode cash flow. Furthermore, aggregate US corporate earnings reports have not disappointed.

On Monday, major Wall Street indices also soared to kick off August trading. The Dow closed at a record high, while Amazon’s market capitalisation briefly surpassed US$3 trillion for the first time. However, Amazon shares fell on Tuesday after Jeff Bezos filed a plan to sell shares worth approximately US$4 billion.

Market participants attributed the Wall Street rally on Tuesday to a combination of positive sentiment, including hopes for a US-Iran deal to reopen the Strait of Hormuz, which caused oil prices to plunge; soaring corporate earnings, with Bank of America estimating S&P 500 earnings grew 27% year-on-year; a broad tech recovery driven by optimism across the AI ecosystem; the S&P 500 breaking through key technical resistance at 7,620; and easing selling pressure after hedge fund Situational Awareness, led by Leopold Aschenbrenner, reduced its massive sell-off.

Indonesia’s financial market is now facing a major domestic sentiment driver: the release of second-quarter 2026 economic growth data. This figure is crucial as it serves as a barometer for public purchasing power and investment flows during the April-June period. Positive external factors, including progress towards peace, weakening oil prices, a softer US dollar and Treasury yields, and record highs on Wall Street, are expected to act as positive catalysts for the domestic market.