Equities are running again after a solid “up” day yesterday. Oil is falling, while gold and silver are rising. The dollar and Treasuries are mostly flat.
The “stocks up, oil down” dynamic is playing out on Wall Street for a second day. Hopes for a deal on the Strait of Hormuz started things down that path on Monday. Then Treasury Secretary Scott Bessent added fuel to the fire today, saying “I think there is a chance we may have a deal today or tomorrow to open the Strait.”
PLTR, MCD, CAT (YTD % Change)
Data by YCharts
A new Goldman Sachs analysis suggests oil flows out of the Persian Gulf are running at only 36% of prewar levels. That’s down from 80% in early July under the previous ceasefire. Still, officials in Qatar, Iran, and Oman have all suggested at various times and with various levels of certainty that a new diplomatic resolution is coming. That has been enough to keep oil prices out of triple-digit territory.
In corporate earnings news, AI darling Palantir Technologies Inc. (PLTR) knocked the cover off the ball in the fiscal second quarter. The company beat Wall Street’s per-share profit estimates by six cents, while reporting a 93% year-over-year jump in revenue. CEO Alex Karp also raised full-year sales targets. Palantir stock surged as much as 16% on the news, though it entered the session down 29.3% year-to-date.
Among widely held names, McDonald’s Corp. (MCD) reported a slowdown in same-store sales growth due to pressure on consumer budgets. But CEO Chris Kempczinski suggested new strategies and products, like crafted sodas, would lead to better results down the road. McDonald’s stock rose modestly on the news. It was down 12.1% YTD through yesterday.
Finally, Caterpillar Inc. (CAT) fared much better. The diversified heavy equipment company reported a 24% surge in Q2 revenue and a 92% year-over-year rise in order backlogs. Caterpillar’s power infrastructure products are essential to data center developers and operators, so it has benefitted enormously from the AI spending boom. CAT shares jumped 9% in early trading, adding to already impressive YTD gains of 45.7%.
