Palantir Soars 27% and Caterpillar Helps Lift the Dow 800 Points

Two days, two very different reasons to rally. Monday's gains came from plunging oil prices. Tuesday's gains were inspired by companies simply reporting excellent results. That's a stronger foundation for sustained gains.

All three major indexes climbed steadily from the opening bell with no real pullback. The Nasdaq Composite (NASDAQINDEX: ^IXIC) index took the lead at 1.9% as of 11:45 a.m. ET. The Dow Jones Industrial Average (DJINDICES: ^DJI) rose 1.5%, worth roughly 800 Dow points, with 22 of its 30 members contributing positive moves. The S&P 500 (SNPINDEX: ^GSPC) landed in the gap, adding 1.3%.

^IXIC data by YCharts

Earnings season delivers for Caterpillar and Palantir

Caterpillar (NYSE: CAT) is doing the heaviest lifting, which feels appropriate. The construction equipment maker jumped 6% and generated about 296 Dow points on its own. The company crushed analyst estimates across the board in Q2 2026, driven by massive demand for Caterpillar's power and energy solutions. That division's sales soared 29% year over year, well ahead of the overall 17% revenue increase.

Palantir Technologies (NASDAQ: PLTR) posted the day's eye-popping jump, rising 27.1% on another analyst-stumping report. U.S. commercial customers are adopting Palantir's AI platform faster than expected. The stock usually barely registers in the cap-weighted market indexes, but this gain was huge enough to set the tone for today's risk-on market mood. Palantir was the second-largest contributor to the Nasdaq and S&P 500's morning upticks.

Image source: Getty Images.

Semiconductor stocks are staging a broad recovery from July's sell-off. The iShares Semiconductor ETF (NASDAQ: SOXX) gained 6.3%, powered by a wide range of double-digit or high single-digit jumps. For instance, Broadcom (NASDAQ: AVGO) gained 6% without company-specific catalysts. Broadcom's market cap is just shy of $2 trillion as of this writing, making it an index-driving powerhouse. Marvell Technology (NASDAQ: MRVL) is up 14% and Micron Technology (NASDAQ: MU) rose 8%.

Oil prices are down significantly as several nations reported progress in the Iranian conflict's diplomatic talks. Gold is up by 0.8% as some investors seek traditional low-risk alternatives even on a tech-friendly market day. Speaking of tech, Space Exploration Technologies (NASDAQ: SPCX) published its first quarterly report as a public company last night, and the stock is up 4.5% today.

Zooming out on a better kind of rally

Yesterday's rally ran on relief. Financial receipts drive today's.

That distinction matters. Oil prices can reverse on a single Strait of Hormuz headline, as the market has repeatedly demonstrated. Caterpillar's 17% sales growth and Palantir's 93% revenue jump are numbers that stay on the books for a quarter, and they set the foundation for future business achievements.

The participation is healthier, too. The Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP) rose 0.9%, and 22 of the 30 Dow components are green. Last Friday, the equal-weight fund was actually red while two mega-caps did all the work, moving the cap-weighted indexes. Broad rallies tend to age better than narrow ones.

For long-term investors, the useful signal isn't the size of the two-day move. It's that companies across very different industries are now reporting real revenue growth tied to AI infrastructure demand, from data center equipment to memory chips to enterprise software. That's a broader base than a handful of cloud computing giants.

Anders Bylund has positions in Invesco S&P 500 Equal Weight ETF and Micron Technology. The Motley Fool has positions in and recommends Broadcom, Caterpillar, Marvell Technology, Micron Technology, Palantir Technologies, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.