Dow futures climb 342 points as Palantir earnings revive AI rally

Palantir's 93 percent revenue surge lifted Nasdaq 100 futures 0.76 percent and pushed the Dow to a record close, with SpaceX and AMD earnings next on the calendar.

Dow futures climbed 342 points Tuesday as Palantir's blowout earnings revived confidence in artificial-intelligence spending, extending a rebound that carried the Dow to a record close. S&P 500 futures added 0.19 percent and Nasdaq 100 contracts gained 0.76 percent at 7:00 a.m. ET.

"Animal spirits are buoyant to begin the month," said Jose Torres, senior economist at Interactive Brokers, pointing to Monday's manufacturing and services readings alongside recent earnings calls as factors lifting confidence about the outlook for capital returns.

Palantir reported second-quarter revenue of $1.94 billion, up 93 percent from a year earlier, and lifted its 2026 sales forecast to $8.15 billion. The results pushed shares up more than 16 percent in premarket trading and lifted AI-linked chip stocks, with Micron adding 3 percent and Marvell jumping 7 percent. The Dow closed Monday at a record 53,178.41, up 1.32 percent, while the S&P 500 gained 1.48 percent to 7,600.50 and the Nasdaq advanced 2.13 percent to 25,913.90, with technology the clear leader.

The rally faces a fresh test Tuesday as SpaceX unveils its debut quarterly results as a publicly traded company after the close, with AMD reporting the same evening. Options data points to a potential $204 billion swing in SpaceX's market value, while Q2 earnings across the S&P 500 are forecast to increase 23 percent, driven largely by AI infrastructure demand.

Oil prices climbed Tuesday, with WTI settling 1.8 percent higher at $81.82 a barrel and Brent crude advancing 2.3 percent to $85.74, after a report of a ship being struck in the Strait of Hormuz. The move reversed part of Monday's 5 percent slide, when President Trump opted not to proceed with planned strikes on Iran and talks progressed on reopening the strait. The 10-year Treasury yield slipped 5 basis points to 4.68 percent Monday, easing inflation concerns that had weighed on equities.

Earnings Drive Premarket Movers

Caterpillar rose 6 percent before the open after its second-quarter earnings beat Wall Street estimates, while ON Semiconductor gained more than 7 percent after reporting adjusted earnings of 74 cents a share on revenue of $1.60 billion, both ahead of forecasts. Snap jumped nearly 9 percent after delivering a broad beat on revenue, adjusted EBITDA and daily active users, pointing to improving advertising demand. Ameresco surged 29.9 percent after raising its full-year outlook on a record project backlog tied to AI data center power demand.

On the downside, Powell Industries tumbled 14 percent after missing expectations on both earnings and revenue for a second consecutive quarter, even as new orders reached a record and backlog expanded. Nike fell 2.5 percent after JPMorgan downgraded the sportswear giant to Underweight from Neutral, cutting its price target to $40 from $47. Amazon slipped 2.1 percent after founder Jeff Bezos disclosed plans to sell 15 million shares worth roughly $4.1 billion through a pre-arranged trading plan.

AI Demand Signal Lifts Chip Complex

Palantir's results provided a fresh read-through for the semiconductor complex, with wider AI deployment requiring more server processors, memory and storage. Morgan Stanley analyst Joseph Moore wrote that AI is consuming so much DRAM that too little remains for PCs and smartphones, with the shortage showing no clear sign of easing. Morningstar's William Kerwin noted that China's CXMT accounted for only about 6 percent of global DRAM output last year, limiting its immediate impact on pricing.

AMD's report after Tuesday's close will test whether data-center demand for EPYC server processors and Instinct AI accelerators justifies current expectations, with management previously guiding to revenue of about $11.2 billion. SanDisk follows Wednesday, with investors seeking evidence that data-center storage demand and constrained supply are supporting NAND prices and margins.

The VIX slipped to 15.69, down 0.17, as the rebound in equities reduced demand for downside protection. The July ISM manufacturing index climbed to 55.6, its fastest growth in four years, adding to evidence that the economy can absorb higher borrowing costs.

This article is for informational purposes only and does not constitute investment advice.