Stocks powered higher on Monday, extending the rally to tree straight sessions in all of the majors, sending the Dow Jones Industrial Average to a record all-time closing high.
The Dow posted a gain of nearly 700 points, betting that already solid quarterly results would be matched or bettered by companies about to report. The Dow components that have already reported include JP Morgan Chase (JPM), Visa (V), Chevron (CVX), Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), Apple (AAPL), Proctor & Gamble (PG), Boeing (BA), and Goldman Sachs (GS).
Queuing up for the Tuesday session, Merck (MRK), McDonald's (MCD), and Caterpillar (CAT) released second quarter results prior to the open.
Merck (MRK) reported a reported adjusted EPS of $0.00 (beating the estimated loss of -$0.257) and generated reported revenue of $16.61 billion, which surpassed the estimated $16.37 billion. The company's financial metrics were heavily impacted by a $5.7 billion one-time acquisition charge tied to Terns Pharmaceuticals, equivalent to a $2.31 per share hit that pulled down GAAP performance. Investors looked past lower guidance to send shares roughly one percent higher in pre-market trading.
McDonald's (MCD) reported Q2 2026 adjusted EPS of $3.38, beating the estimated $3.321, while its reported revenue of $7.099 billion missed the estimated $7.126 billion. The stock was essentially flat prior to the opening bell.
Caterpillar (CAT) soared, beating top and bottom line estimates. Caterpillar reported a major beat for Q2 2026, delivering an adjusted EPS of $8.17 compared to the estimated $6.197, and generating revenue of $20.543 billion against expectations of approximately $19.199 billion. Following the blowout quarter, Caterpillar lifted its full-year 2026 revenue growth target to a mid-to-high-teens percentage range, up from its previous projection of low-double-digit growth. Caterpillar's stock was seen rising by as much as 12% in the pre-market.
At more then $800 per share, CAT is a heavyweight on the Dow and has sent Dow Futures soaring
After Monday's close, Palantir (PLTR) reported blowout earnings, sending shares up 15%, helping fuel a strong recovery on the NASDAQ.
At around 8:30 am ET, Dow futures are up 665 points, NASDAQ futures are ahead by 317, with S&P futures rising 26 points.
The S&P 500 is just nine points shy of a record closing high, which looks to be well withing range on Tuesday. The NASDAQ continues to lag, but, after a sharp selloff on fears of AI infrastructure overspending, bargain hunters are sure to step in and boost prices for hyperscalers like Amazon, Alphabet, Meta Platforms and others. If current trends remain in place, the NASDAQ should surpass its own All-time high of 27,093.90 within weeks. It is roughly a 5% move.
Adding to the happy mood on Wall Street is the situation in the Middle East, with President Trump insisting that peace talks with Iran are moving forward, despite denials from the Iranians. In any case, the hostilities have diminished recently, with no major strikes by either side since last week. For its part, Iran continues negotiations with Oman and Qatar, seeking resolution to the logjam at the Strait of Hormuz.
Treasury Secretary Scott Bassent has chimed in, noting that a deal to open the strait to oil and other commercial traffic could come as early as tomorrow (or maybe today). How much of what the administration touts as progress is a matter of some conjecture. The administration has repeatedly talked "deal or no deal" over the past three months. The usual situation emanating from the proclamations and narrative-building is for negotiations to fail at the last minute, sending the region back to wartime positioning and oil spiking higher. Whether or not this is another head fake by Trump and his staff remains to be seen.
For now, markets have bought in, sending stocks higher, treasury yields and the price of oil lower.
Wall Street and the stock-trading Capitol Hill gang are on a roll.
At the Close, Monday, August 3, 2026:
Dow: 53,178.41, +693.38 (+1.32%)
NASDAQ: 25,913.90, +540.04 (+2.13%)
S&P 500: 7,600.50, +110.78 (+1.48%)
NYSE Composite: 24,255.53, +147.98 (+0.61%)
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