Key Takeaways

  • Palantir Technologies surged 29.5% after reporting 93% revenue growth and raising its 2026 forecast.
  • Falling Brent crude prices and Treasury yields added support for technology shares and broader equity valuations.
  • Nvidia, Broadcom, Micron Technology, and Caterpillar showed how AI spending is spreading across chips, software, and data center infrastructure.

Corporate earnings and easing energy prices pushed the major US stock indexes to new records Tuesday, with artificial intelligence businesses delivering some of the session’s strongest gains.

The S&P 500 climbed 1.8% to finish at a new all-time high. The Dow Jones industrial average advanced 907 points, or 1.7%, extending the record it set Monday. The technology-heavy Nasdaq composite rose 2.6%.

Palantir Technologies supplied the biggest jolt. Its shares jumped 29.5% after the AI-powered analytics provider reported that overall revenue increased 93%. The chief executive officer described the quarter as “otherworldly.” The company also delivered a stronger spring profit than analysts expected and increased its revenue forecast for the full year of 2026.

Investors have increasingly looked for evidence that large AI investments can translate into recurring revenue, expanding workloads, and stronger profits. Palantir Technologies offered evidence of this transition, reinforcing the market’s preference for businesses already monetizing AI rather than simply promising future products.

According to McKinsey estimates from 2023, generative AI could add between $2.6 trillion and $4.4 trillion annually to the global economy. The market continues to assess which businesses will capture that value and how much upfront spending will be required.

Chipmakers were another major source of strength, with Nvidia, Broadcom, and Micron Technology posting gains. Their performance reflects expanding demand for accelerators, networking components, and memory used in AI data centers. Microsoft and Amazon had already contributed strong results to the earnings season, adding evidence that demand spans cloud infrastructure, enterprise software, and computing hardware.

The AI buildout is expanding beyond recognizable technology vendors. Caterpillar climbed 5.6% after reporting profit and revenue above analysts’ expectations. The company generated more than $20 billion in quarterly sales and revenue for the first time. The chief executive officer pointed to strong order rates and a growing backlog across Caterpillar’s main businesses.

Part of this demand comes from turbines used to power data centers. Electricity supply, cooling systems, and backup generation are becoming central constraints on AI capacity, drawing industrial businesses into a spending cycle once associated mainly with semiconductor and cloud companies. As a result, equipment manufacturers and energy infrastructure suppliers are increasingly benefiting from AI investments.

Broader spending projections support this industrial expansion. Gartner projects worldwide AI software revenue will reach about $135 billion in 2025, growing more than 50% annually from 2023 levels. Similarly, IDC forecasts global spending on AI systems to hit $300 billion by 2026, with over 60% allocated to U.S.-based use cases.

Oil provided a second tailwind as Brent crude prices eased, reducing pressure on transportation costs, inflation expectations, and corporate margins. The U.S. Energy Information Administration expects Brent crude to average around the low-$80s per barrel in 2026, offering a moderated benchmark after recent geopolitical shocks.

Bond markets responded as well, with Treasury yields easing. Lower yields can support equity valuations while reducing prospective financing costs for corporate investment and capital-intensive AI data centers.

For boards overseeing the AI expansion, growth is only part of the calculation. The NIST AI Risk Management Framework offers guidance for managing reliability, transparency, and governance concerns as AI systems move into production. Sustaining market confidence will depend on translating investments into profits, disciplined infrastructure spending, and credible controls around deployment.