AI-Driven Earnings Lift S&P 500 and Dow to Record Highs

The S&P 500 and Dow hit record highs on Tuesday after strong forecasts from AI-linked companies like Meta and Palantir reassured investors about demand for artificial intelligence.

Caterpillar, a bellwether for the global industrial economy, gained 12% after raising its annual revenue growth forecast. The company's results benefited from a buildout of AI data centers that has spurred demand for its power-generation and construction equipment.

Investors have been scrutinizing results from AI-linked companies this earnings season for signs that their investments are yielding returns. Strong results from AI leaders like Meta and Palantir last week were a relief, but the question remains whether these gains will be sustainable.