By Johann M Cherian and Shashwat Chauhan

Aug 3 (Reuters) - Wall Street's main indexes rose over 1% each on the first trading day of August as signs of de-escalating U.S.-Iran tensions dragged down crude prices, while investors prepared ‌for another week packed with earnings and economic data.

Most megacap and growth stocks gained, with Amazon.com rising 5.3% to ‌cross $3 trillion in market value for the first time.

U.S. President Donald Trump said on Sunday that talks with Iran to reopen the Strait of Hormuz would take ​place sometime on Monday, though Iran contradicted him. Brent crude prices slid 6% while the yield on the two-year Treasury note dipped 3.3 basis points.

Seven of the 11 S&P sectors advanced, led by communications services. Alphabet and Meta rebounded 4.7% and 6.7%, respectively, from steep declines in July.

Apple, on the other hand, shed 1.6%.

Amazon and Microsoft's earnings last week alleviated some concerns about the lack of evidence of any payoff ‌from elevated AI spending, but investors will ⁠be keen on how other major names fare.

"All the hyperscalers are continuing to spend money and are increasing the amount of capital expenditures. So I think investors are looking to see what's the return ⁠on investment and corresponding growth in various revenue areas," Chris Zaccarelli, chief investment officer for Northlight Asset Management, said.

AI neocloud companies such as Nebius and CoreWeave gained over 13% each.

SpaceX, which on Tuesday will report its first quarterly results since going public, advanced 2.3%. The stock has been trading ​below ​its $135 offering price for nearly three weeks.

Other AI-linked companies reporting this week ​include Palantir, Advanced Micro Devices as well as data ‌storage companies SanDisk and Western Digital.

At 11:44 a.m. ET the Dow Jones Industrial Average rose 553.78 points, or 1.06%, to 53,038.81, the S&P 500 gained 91.12 points, or 1.22%, to 7,580.84 — both near record levels. The Nasdaq Composite jumped 474.51 points, or 1.87%, to 25,848.37.

Wall Street had a rough July due to global concerns about the AI trajectory, future interest rates and the U.S.-Iran conflict.

Chip stocks, which were a drag last month, were mixed on Monday, with the Philadelphia chips index down 0.1%. Micron lost 1.9% after Reuters reported that Chinese rival CXMT is considering a second memory-chip plant in Beijing.

Traders also weighed a ‌potential consolidation in the healthcare sector after a report said Bristol Myers ​Squibb and AstraZeneca held preliminary merger talks. A deal could form one of ​the world's biggest drugmakers, worth nearly $400 billion. The U.S. company's ​shares gave up early gains to trade down 0.4%.

Shares in AstraZeneca dropped by nearly 3% at market open after a report that the drugmaker is in talks with oncology rival Bristol Myers Squibb (BMS) regarding a mega-merger deal.

According to the Financial Times (FT), which first reported the discussions, a tie-up would create one of the largest pharmaceutical companies in the world with a combined value of nearly $400bn. If it goes ahead, the deal will also rank amongst the largest ever in pharmaceutical M&A history.

The FT stated that the structure of any possible deal was not yet known but that both cash and shares would feature.

An AstraZeneca spokesperson declined to comment on the report to Pharmaceutical Technology. BMS did not immediately respond.

Shares in London-listed AstraZeneca slumped by 2.7% at market open on 3 August following the media rumours, down from a close of £12,632 on 31 July.

AstraZeneca, the UK's second most valuable listed company, has a market capitalisation of about £182bn ($245bn), while US-headquartered BMS is worth roughly $133.4bn.

In a research note, Citi analysts said a merger "would be a surprise" given AstraZeneca's market-leading pipeline and its positive momentum in meeting 2030 revenue targets, though they did state that their portfolios are "somewhat complementary".

The analysts added that BMS' market capitalisation would provide it with "significant equity" in any future combined entity.

The reported discussions between the two companies come soon after AstraZeneca began trading ordinary shares on the New York Stock Exchange (NYSE) in February 2026. According to previous media reports, CEO Pascal Soriot had been considering delisting the drugmaker from the London Stock Exchange (LSE). A deal with BMS, which would extend both the company's operations and footprint in the US, will only heighten concerns regarding the competitiveness of the UK pharmaceutical industry.

From the US perspective, the tie-up's structure would need to align with President Trump's domestic manufacturing agenda. The US government has been proactive in reducing the reliance on imports for medicines used in the country. As with other large-scale deals, any potential combination will likely need to pass US antitrust evaluations.

While 2026 has been associated with a significant increase in M&A activity, the last true mega-deal in the industry was Pfizer's $43bn acquisition of Seagen in 2023. The largest deal in the past decade was conducted by BMS when it acquired Celgene for $74bn in 2019. Other large deals include AbbVie's $63bn acquisition of Allergan in 2020 and Takeda's $62bn merger with Shire in 2019.