U.S. stock futures pointed to a higher open on Tuesday, with the Dow Jones Industrial Average leading the way thanks to a blockbuster earnings report from Caterpillar. Dow futures climbed roughly 1.2%, or about 650 points, with the heavy machinery giant contributing the vast majority of that advance.
According to Barron's, Caterpillar was responsible for more than 564 points of the Dow's 622-point gain, representing over 90% of the index's move. This concentration underscores the Dow's price-weighted methodology, where higher-priced stocks have outsized influence. Caterpillar shares traded near $927 ahead of the open, making it the second most expensive stock in the index, behind Goldman Sachs at approximately $1,041.
The broader market also showed strength. Nasdaq 100 futures rose 1.1%, while S&P 500 futures gained 0.3%. The more modest advance in the S&P and Nasdaq suggests that while risk appetite remains intact, the Dow's rally is heavily reliant on a single stock. Both indexes were supported by robust earnings from AI-related companies, which have been a key driver of market momentum.
Caterpillar's record quarter
Caterpillar posted a 24% increase in sales to $20.5 billion, marking its first quarter with revenue above the $20 billion threshold. Adjusted earnings surged to $8.17 per share from $4.72 a year earlier. The company's operating margin expanded to 20.9% from 17.3%, reflecting strong pricing and operational efficiency.
CEO Joe Creed attributed the results to "broadening momentum across all three of our primary segments," with strong orders and a healthy backlog. The earnings beat sent shares up approximately 11% in premarket trading, setting the stage for a record session.
Tech and AI earnings shine
Palantir Technologies also delivered a standout report, with revenue jumping 93% to $1.935 billion. U.S. commercial revenue surged 149% to $764 million, underscoring continued demand for AI software and data infrastructure. The company raised its full-year revenue guidance to a range of $8.150 billion to $8.158 billion, up from the prior forecast of about $7.65 billion to $7.66 billion.
Other notable movers included onsemi, which rose about 7% on upgraded revenue expectations, and Advanced Micro Devices, which gained nearly 5% ahead of its quarterly report due after the close. McDonald's added about 1% after beating earnings estimates, while Spotify slipped roughly 4% on a miss.
Earnings season strength
The strong reports are part of a broader trend. Of the 304 S&P 500 companies that have reported results as of Friday, 85.2% exceeded expectations, well above the historical average of 67.5%. Aggregate earnings growth came in at 29.3%, highlighting the resilience of corporate profits.
Economic data on tap
Investors also digested the latest trade figures. The U.S. trade gap narrowed to $73.3 billion in June from $77.6 billion in May, helped by a decrease in the goods deficit and a slight increase in the services surplus. The data was released at 8:30 a.m. EDT. Later this morning, at 10 a.m., the June job openings report is due, with consensus estimates pointing to 7.4 million openings, down from 7.6 million previously.
Oil and other market drivers
Oil prices provided additional support, with U.S. crude falling over 3% to trade near $77.50 a barrel. Treasury Secretary Scott Bessent suggested that a deal regarding the Strait of Hormuz could be reached as soon as Tuesday or Wednesday, easing supply concerns. However, uncertainty around the negotiations leaves oil exposed to potential reversals.
Looking ahead, quarterly results from AMD and SpaceX are expected after the market close, with investors watching for continued AI-driven demand for processors and data-center investment. Strong job openings data could also push Treasury yields higher, adding a layer of risk to the market's optimistic tone.
Given Caterpillar's outsized influence on the Dow, single-stock risk remains elevated. But the broader market's gains, supported by AI earnings and easing oil prices, suggest that investor confidence remains firm.
