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

The S&P 500 and Dow Jones Industrial Average hit record highs on Tuesday after strong earnings from Caterpillar and Palantir reassured investors about AI-driven demand. The companies' revenue forecasts, particularly from AI-linked businesses, have been a key focus for investors this earnings season.

Caterpillar gained 5.8% and Palantir soared 26%, with the latter's annual revenue forecast raised again. This performance has underpinned gains on Wall Street following a turbulent July.

'The AI earnings performance has been fantastic, but the big question is if it will be sustainable,' said Eric Parnell, chief market strategist at Great Valley Advisor Group.