US stocks hit records as profits keep piling up for Palantir and others,
while oil prices ease
[August 05, 2026] By
STAN CHOE
NEW YORK (AP) — The U.S. stock market rallied to records on Tuesday as
profits kept piling up for companies and as oil prices eased.
The S&P 500 shot up 1.8%, and the main measure of Wall Street’s health
topped its prior all-time high set a couple months ago. The Dow Jones
Industrial Average added 907 points, or 1.7%, to its own record set the
day before, while the Nasdaq composite jumped 2.6%.
Despite worries about high inflation, the war in Iran, frustration with
the economy and a possible bubble in stock prices because of the boom in
artificial-intelligence technology, Wall Street hit its latest apex and
rewarded investors who remained patient because profits keep soaring for
companies. Stock prices tend to follow the path of corporate earnings
over the long term.
Palantir Technologies helped lead the way and surged 29.5% after CEO
Alex Karp said its overall revenue leaped 93% in what he called an
“otherworldly” quarter. Besides reporting a stronger profit for the
spring than analysts expected, the AI company also raised its revenue
forecast for the full year of 2026.
Caterpillar climbed 5.6% after the heavy-equipment maker likewise
reported stronger profit and revenue than analysts expected. It was the
first time Caterpillar made more than $20 billion in sales and revenue
in a quarter, and CEO Joe Creed said it’s seeing strong order rates and
a growing backlog across its main businesses.
Caterpillar is also benefiting from the AI boom through increased orders
for turbines used to power data centers, among other things.
They’re the latest companies to deliver even better profits for the
latest quarter than investors expected, following strong results from
Amazon, Microsoft and others. Coming into this week, companies in the
S&P 500 index were on track to deliver growth of nearly 50% in earnings
per share for the spring from a year earlier, according to FactSet.
That would be the biggest such jump since 2021, when the economy was
roaring back to life after cratering in the COVID-19 pandemic. With
corporate profits up so much, when stock prices are still roughly where
they were two months ago, stocks don’t look as expensive as they did
before, according to Phil Segner, a co-portfolio manager at the Leuthold
Group.
Also helping stocks on Tuesday was another drop for oil prices.
Brent crude, the international standard, sank 5.3% to $79.36 per barrel
as hope once again took over from fear in the oil market. It had swung
sharply between $72 and $102 through July on uncertainty about when the
war with Iran would allow oil tankers to freely exit the Persian Gulf
again to deliver crude around the world.
It’s jerked up and down many times as uncertainty built, receded and
then built again, not only week to week but also hour to hour. Analysts
warn more swings could be ahead, but the latest drop in oil prices
nevertheless helped ease Wall Street’s worries about inflation. That
pulled down yields in the bond market, which in turn relaxed pressure on
the overall economy and on prices for stocks and other investments.
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A trader works on the floor of the New York Stock Exchange,
Thursday, July 30, 2026, in New York. (AP Photo/Yuki Iwamura)
 The yield on the 10-year Treasury
fell to 4.62% from 4.70% Monday and from 4.75% at the end of last
week. That’s a notable move for the bond market, though it remains
well above its 3.97% level from before the war with Iran.
Higher yields make it more expensive for all kinds of Americans to
borrow money, from homebuyers looking for a mortgage to big
companies looking to build AI data centers.
Reports on the U.S. economy, meanwhile, showed it remains resilient
even though inflation remains worse than anyone would like. One said
U.S. employers were advertising nearly 7.4 million job openings at
the end of June, a slight slowdown from May’s level but close to
economists’ expectations.
In stock markets abroad, indexes rose modestly across much of Europe
and Asia.
South Korea’s Kospi had a more significant move and climbed 1.6%.
Seoul has seen some of the world’s sharpest swings because two
companies swept up in AI mania dominate its market, Samsung
Electronics and SK Hynix. The Kospi had dropped 5.1% and soared
17.9% in the prior two days.
Stocks of computer chip companies also strengthened on Wall Street,
where gains of 2.6% for Nvidia, 6.6% for Broadcom and 7.6% for
Micron Technology were some of the strongest forces lifting the S&P
500.
They more than offset a drop for Chipotle Mexican Group, which fell
9.7% on fears that future profits could be hurt after the chain
removed jalapeños from some of its restaurants following a
salmonella outbreak. Chipotle said that Minnesota health officials
have no ongoing concerns with it.
All told, the S&P 500 rallied 136.02 points to 7,736.52. The Dow
Jones Industrial Average jumped 907.47 to 54,085.88, and the Nasdaq
composite climbed 671.10 to 26,584.99.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this
report.
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