The SPDR S&P 500 ETF Trust (SPY) rallied to record levels on August 4 as earnings from artificial intelligence-focused companies fueled a broad market advance. Palantir Technologies surged over 15% in early trading after reporting second-quarter revenue of $1.94 billion, up 93% year-over-year, while raising its full-year guidance to $8.15 billion to $8.16 billion.
The strong quarterly results from Palantir and other technology firms drove investor confidence in the AI infrastructure buildout. Microsoft had already posted a 16% gain on August 3 following its earnings beat on Azure growth, setting the stage for today’s broader rally.
AI-related stocks have become the primary engine of the S&P 500’s 2026 advance. Second-quarter earnings growth for the index reached 24.7%, compared to 23.2% at the end of June, marking the second consecutive quarter above 20%, according to earnings tracking data. The S&P 500 has already reached all-time highs 23 times in 2026, with the index crossing above 7,600 for the first time in June.
Palantir’s earnings beat highlighted the acceleration in AI adoption across both government and commercial sectors. The company closed 220 deals worth at least $1 million in the quarter, demonstrating broad-based demand for its AI software platform. Analysts noted that the company’s nine-month bear market had created expectations for a potential turnaround, which today’s results delivered.
The broader technology sector has led gains throughout 2026, with information technology up more than 16% year-to-date. Alibaba also contributed to the AI rally on August 3, jumping 5% after unveiling its Qwen3.8-Max artificial intelligence model, adding to the momentum heading into today’s session.
Investors have increasingly focused on companies directly benefiting from the massive capital expenditures flowing into AI infrastructure and software. With Q2 earnings season confirming that AI capex is accelerating, the market has rewarded companies demonstrating both strong revenue growth and clear pathways to profitability in the AI era.
Sources
- Investing.com — Palantir’s Q2 2026 revenue surge and full-year guidance raise
- The Street — S&P 500 jump on Palantir earnings and market reaction
- Zacks — Palantir Q2 revenue growth and deal closures
- Yahoo Finance — S&P 500 record highs and all-time high count in 2026
- Internal Pool — Microsoft earnings beat on Azure growth, Alibaba AI model announcement
