AI-Linked Earnings Fuel Record Highs on Wall Street

The Dow Jones Industrial Average and Standard & Poor's 500 closed at record highs on Tuesday, driven by strong earnings reports from AI-related companies.

Palantir Technologies led the pack with a 29.5% surge after increasing its annual revenue forecast. The company's stock recorded its biggest daily percentage gain since February 2024.

Caterpillar also contributed to the rally, jumping 5.6% after raising its own annual revenue growth forecast. The buildout of AI data centers has fueled demand for the company's power-generation and construction equipment.

The decline in crude prices by about 5% following a Qatari official's statement on diplomatic efforts to resolve the Iran conflict further boosted stocks. U.S. Treasury Secretary Scott Bessent also hinted at a possible deal with Iran within two days, which led to a drop in expectations for a Federal Reserve rate hike.

Jack Ablin, chief investment strategist and founding partner at Cresset Capital Management, noted that investors seem 'not one ounce of skepticism' about the market.