0804 | U.S. Stocks Rally, AMD Data Center Doubles, Palantir Surges, Caterpillar Beats

Mia: Welcome back to After Market, I'm Mia, and alongside me is Milo. It was another strong session for U.S. stocks, with the Dow turning in its best day in nearly two months and the S&P 500 pushing to fresh highs. We've also got big movers to dig into.

Milo: That's right, Mia. We'll look at a blowout quarter that sent one stock soaring nearly thirty percent, a chipmaker whose strong results still left shares under pressure, and new signals from Treasury Secretary Scott Bessent on both the Strait of Hormuz and the yen. Plus Caterpillar's earnings surprise, so let's get into it.

Mia: Let's start with the broad market. U.S. equities closed higher Tuesday, with the Dow recording its best day in nearly two months and the S&P 500 climbing to new highs. The market is once again trading near record territory.

Milo: And that strength came despite some investors harboring major worries about disappearing cash flows at some of the big tech names. One unnamed CIO put it this way: the AI trade has entered a kind of kindness of strangers phase, meaning these companies now rely on outside funding. But keep in mind, that's one strategist's characterization, not a consensus view.

Mia: There's also a contrarian caveat worth noting. Investor Michael Burry said in a Tuesday Substack post that he continues to believe it's possible we're near a major top, and possibly facing a 1987-type fall. The headline frames him as betting against the rally. But notice his language is conditional, possible, so treat it as a warning on the table, not a forecast.

Mia: Now to a notable disconnect at AMD. The chipmaker's latest reported figures show revenue climbed fifty percent, and data center sales doubled, with the Data Center unit up over a hundred percent year over year and driving company growth. Yet the stock is down.

Milo: So you have investors facing a real divergence, strong earnings versus negative price action. That makes AMD's earnings report coming Tuesday after the bell a key test, not just for the company, but for the whole chip and momentum trade. There's nothing in the reporting on how far the stock fell, or what options positioning tells us, but the stakes are clear. When a company's growth engine is that strong and the market still says sell, everyone watches how that resolves.

Mia: Palantir was the standout mover. The stock skyrocketed about twenty-nine percent after the company's second-quarter earnings, results its own reporting called blowout and even otherworldly. The gain narrowly missed the stock's best day ever.

Milo: And CEO Alex Karp had a striking line after the report, saying customers have declined to become vassal states of the language labs. That's his framing, a pointed jab at how his clients are choosing not to be locked into the big AI model providers.

Mia: One headline attributes the continued post-earnings strength to something called an AlphaSpace stat of the morning, but that figure isn't available to us. So while the move itself is confirmed, the underlying revenue, profit, and guidance numbers that fueled that blowout label, and the specific metric driving the follow-through, all remain unverified from this evidence.

Mia: Caterpillar delivered a surprise. The company reported second-quarter results that crushed Wall Street's expectations, citing stronger sales across its businesses, a record equipment backlog, and a raised sales forecast for 2026. Headlines put the stock up nine percent on record quarterly revenue.

Milo: And there's an interesting link in the reporting. Bloomberg ties that improved outlook to the data center boom, in other words, the AI buildout driving demand for heavy equipment. Separately, Wells Fargo is making a similar case more broadly, arguing the flood of AI spending by big tech companies is trickling down to the broader economy and poised to push up industrial stocks. That's Wells Fargo's own view, though, not a confirmed outcome.

Mia: Shifting to energy and rates. Treasury Secretary Scott Bessent told CNBC that a deal to reopen the Strait of Hormuz could come as soon as Tuesday or Wednesday, with what he called freedom of movement. He said, quote, we are in talks with the Iranians.

Milo: Oil prices tumbled on the news, and losses extended after the U.S. and Qatar signaled progress on an Iran draft deal. President Trump, for his part, warned that the latest round of negotiations is the last chance to end the five-month conflict. Meanwhile, OPEC output rose in July, led by Gulf nations, according to a survey. And here's the knock-on effect: Treasuries rose as cheaper oil eased pressure on the Federal Reserve.

Mia: The stakes are straightforward. A reopened strait would support freedom of navigation and potentially loosen the oil supply picture, while cheaper crude removes an inflation pressure the Fed has been watching. The big caveat is that nothing is confirmed. Bessent framed it as a possibility for this week, and talks are still ongoing.

Mia: And finally, the yen. The Japanese currency strengthened sharply after the U.S. government stepped into the currency market. Bessent said the U.S. bought yen alongside Japan to curb volatility and reduce risks to Asian markets. The yen has since eased a little, but it's held on to its intervention-driven gains.

Milo: After that historic move, the level of one hundred fifty-five now looks like the yen's next big test. And there's a careful dance here for Bessent. He wants to defend the yen without selling Treasuries into a sensitive U.S. bond market, and some analysis suggests the Federal Reserve could ultimately help out. That ties this currency story straight back to conditions U.S. investors care about.

Mia: That'll do it for today's show on After Market. We appreciate you tuning in.

Milo: The market's soaring, but look closer and there are divergences everywhere, strong earnings met with selling, intervention-driven gains testing support. Watch the chips, watch the data center trade, and watch the yen at one fifty-five. Thanks for joining us, and we'll see you next time.