U.S. equity markets opened modestly higher Tuesday as investors weighed strong earnings from artificial intelligence powerhouse Palantir against pressure from surging tariffs and commodity-related margin challenges at Caterpillar and Hims & Hers. All three major indexes advanced at the open, with the Dow Jones Industrial Average up 33.93 points (+0.08%) to 44,207.60, the Nasdaq Composite gaining 7.77 points (+0.04%) to 21,061.30, and the S&P 500 adding 4.79 points (+0.08%) to 6,334.73.

Gold and Oil Diverge as Commodities Reflect Demand Worries

In commodities, December gold futures slipped $8.70 (-0.25%) to $3,417.70 in early trade, retreating from Monday’s rebound. Crude oil prices saw sharper declines, with September contracts dropping $0.94 (-1.42%) to $65.35 per barrel. The selloff in oil reflects a combination of weak global demand signals and ongoing geopolitical uncertainty. Energy commodities rose modestly in July, but industrial metals surged 1.7%, according to Goldman Sachs, adding to inflationary pressure in manufacturing.

Palantir Smashes $1B Milestone, Raises Guidance Again

Shares of Palantir Technologies (PLTR) jumped in early trading after the software firm reported a blockbuster second quarter. Revenue surged 48% year-over-year to $1.004 billion, surpassing the $1 billion mark for the first time. U.S. commercial revenue exploded 93% to $306 million, while government contracts rose 53% to $426 million. Operating income reached $269 million with a robust 46% adjusted margin.

CEO Alex Karp told CNBC the company plans to grow revenue tenfold while shrinking headcount, calling it a “crazy, efficient revolution.” The company closed a record $2.27 billion in total contract value, up 140% year-over-year. Free cash flow stood at $569 million, reinforcing Palantir’s growing operational leverage.

Still, analysts flagged valuation concerns, with shares trading at 276 times forward earnings—well above peers like Tesla. “The fundamentals support further upside,” Wedbush noted, “but prudent investors will want to keep valuation ‘out to the side’ for now”.

Caterpillar Struggles with Tariffs Despite Strong Demand

Caterpillar (CAT) shares fell roughly 4% in premarket trading as investors digested a mixed second-quarter report. Revenue came in at $16.6 billion, slightly beating estimates, but adjusted earnings per share missed at $4.72 (vs. $4.88 expected). Operating profit fell 18% year-over-year as tariffs drove manufacturing costs higher, compressing margins to 17.6% from 22.4% last year.

Tariffs weighed heavily across segments. Construction Industries revenue declined 7% amid pricing pressure and lower dealer inventories, while Resource Industries sales fell 4%. Conversely, Energy & Transportation stood out, with a 7% revenue gain fueled by demand from data centers and oil and gas clients. Management said tariffs will add $1.3 billion to $1.5 billion in costs for the year.

While Caterpillar guided for modest 2025 sales growth and pointed to a $2.5 billion increase in backlog, investors remain cautious as margins trend toward the low end of its target range.

Hims & Hers: Growth vs. Margin Compression

Hims & Hers (HIMS) posted 73% year-over-year revenue growth to $544.8 million in Q2, but fell short of Street expectations of $551.6 million. Adjusted EBITDA, however, beat at $82.2 million. Shares pulled back to the $53–$55 range, as traders digested near-term risks including negative free cash flow of $69 million and 500bps margin compression, down to 76%.

The company’s GLP-1 weight-loss programs continue to drive top-line growth, with users losing an average of 10.3% body weight over six months. Yet compounded drug shortages and pricing volatility pose headwinds. Management reaffirmed full-year guidance and teased international expansion in 2026, but regulatory complexities and debt exposure remain concerns.

Inflation Still Sticky, Tariffs Pressuring Outlook

New data from Goldman Sachs highlights ongoing inflation risks, with core PCE inflation rising to 2.79% year-over-year in June. The firm now expects core PCE to peak at 3.3% by year-end, driven by tariffs on imported goods including autos and electronics. Notably, tariffs are estimated to add 50bps to inflation in 2025 alone.

Despite rising costs, supplier delivery times have started to normalize, and rent inflation continues to ease. Still, the interplay between elevated inflation, geopolitical frictions, and sector-specific tariffs is raising concerns for manufacturers and health companies alike