Key facts
- The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all reached record highs on Tuesday.
- Palantir Technologies reported a 93% revenue increase and raised its 2026 revenue forecast.
- Caterpillar exceeded profit and revenue expectations, marking its first quarter with over $20 billion in sales.
- S&P 500 companies were on pace for nearly 50% earnings per share growth for the quarter.
- Brent crude oil prices dropped 5.3% to $79.36 per barrel.
- The 10-year Treasury yield fell to 4.62%.
The US stock market reached record highs on Tuesday, buoyed by a wave of strong corporate earnings and a decline in oil prices. The S&P 500 climbed 1.8%, the Dow Jones Industrial Average gained 1.7% to a new record, and the Nasdaq Composite rose 2.6%.
AI-focused company Palantir Technologies was a significant driver, surging 29.5% after CEO Alex Karp announced an 'otherworldly' quarter with a 93% revenue leap and an increased full-year revenue forecast for 2026. Heavy equipment maker Caterpillar also saw a 5.6% increase in its stock price following better-than-expected profit and revenue, attributed to strong order rates and a growing backlog, with AI-related orders for data center turbines contributing.
These results follow strong performances from other major companies like Amazon and Microsoft, contributing to an overall earnings growth of nearly 50% in earnings per share for S&P 500 companies in the latest quarter, the largest jump since 2021. This profit surge, combined with stock prices remaining relatively stable, has made stocks appear less expensive, according to Phil Segner of The Leuthold Group.
Further supporting the market rally was a drop in oil prices, with Brent crude sinking 5.3% to $79.36 per barrel amid renewed optimism in the oil market. The yield on the 10-year Treasury note also fell to 4.62% from 4.70%, potentially easing borrowing costs for businesses, including those investing in AI data centers.
Stocks of major computer chip companies also performed strongly, with Nvidia up 2.6%, Broadcom 6.6%, and Micron Technology 7.6%. These gains helped offset a 9.7% drop in Chipotle Mexican Group's stock, which was impacted by concerns over future profits following a salmonella outbreak and the removal of jalapeños from some restaurants.
Overall, the S&P 500 closed up 136.02 points at 7,736.52, the Dow Jones Industrial Average finished up 907.47 at 54,085.88, and the Nasdaq Composite ended the day up 671.10 at 26,584.99.