Trump Hits Big Oil | Palantir Blows Out | States Sue Tariffs | AI Is GDP

Palantir Surged 15%. Caterpillar Jumped 8%. Futures Are Green Again.

Palantir Technologies (PLTR) surged roughly 15% in premarket on blowout earnings. Caterpillar (CAT) jumped roughly 8% after beating estimates by a wide margin. Nasdaq futures led the gains.

WTI reversed Monday's sharp drop at the open. Trump called Iran talks "the last chance" for a deal. Iran denied any negotiations were even planned. The diplomatic picture is murkier than Monday's relief suggested.

SpaceX (SPCX) reports after the bell. It is down more than 50% from its June peak and short sellers are sitting on billions in paper profits.

The Signal

ADP, ISM Services, and Fed Governor Cook all land mid-week. Payrolls close the week. The market is running up into the most consequential data stack since the Fed decision. If the data prints hot, the tape has been pricing in the wrong thing.

Trump Called Out Chevron's CEO by Name. He Said Big Oil Should Give Profits Back.

Trump told reporters Monday that Chevron (CVX) and ExxonMobil (XOM) are "making too much money" and said they should give some back to the public. He then posted on Truth Social attacking CEO Mike Wirth directly after Wirth appeared on Fox Business. The specific reference to the company that "made 12 times what they made the year before" points directly at Chevron's nearly 400% Q2 profit growth.

This is the Biden-era energy political playbook, and Trump just adopted it. Both companies are maximizing margins because Iran closed Hormuz. That is not profiteering — it is arithmetic. But midterms are approaching and $4.55 gasoline is a political problem regardless of causation.

The SPR is at 1983 lows with roughly 103 million barrels not even deployable. Big Oil has no real lever to pull, and neither does Trump beyond diplomacy.

What's Moving

• Wirth named Red Sea and Black Sea supply risks expanding beyond Hormuz
• U.S. oil exports fell to an eight-month low in July per Reuters
• Williams Companies (WMB) agreed to acquire Momentum Midstream for $5.5 billion Monday
• ConocoPhillips (COP) and Occidental (OXY) plan to absorb the criticism and wait

The Read

Trump predicting prices fall when the war ends is the same as admitting diplomacy is the only real tool. If talks succeed, prices fall without any Big Oil action needed. If they collapse, no bully pulpit replaces the Strait. Chevron and Exxon absorb the noise and keep running at record capacity either way.

Palantir Grew 149% in U.S. Commercial Revenue. It Extended AI Monetization 18 More Months.

Palantir posted 93% total revenue growth and 149% U.S. commercial revenue growth in Q2. CEO Alex Karp said the momentum looks like it will continue for at least 18 more months. Remaining U.S. commercial deal value more than doubled to $6.24 billion. Full-year guidance was raised sharply.

Amazon extended AI compute demand to 2028. Palantir extended AI software monetization 18 months from here. The AI bull case now has independent confirmation at two different layers of the stack simultaneously.

Palantir's government contract base also benefits directly from the OpenAI and Anthropic hacking incidents. Institutions that need to secure AI systems they did not have six months ago are exactly Palantir's customer base.

What's Moving

• U.S. commercial deal backlog more than doubled to $6.24 billion year over year
• U.S. government revenue grew 90% to $809 million in Q2
• Karp endorsed open-weight models and named Chinese competition as the forcing function
• AMD (AMD) reports after the bell today, the next test of the AI stack

The Read

Palantir is the first major software name to confirm AI monetization at scale outside of cloud infrastructure. Microsoft did it through Azure. Palantir did it through enterprise contracts. If AMD confirms the compute layer today, the AI stack has validated from model to chip within a single earnings week.

25 State AGs Sued the Section 301 Tariff Framework. The Legal Pressure Is Now Official.

Twenty-five Democratic state AGs sued the administration over the Section 301 tariff framework covering 60 trading partners at 10-12.5%. The lawsuit names Bessent's comment that rates would return to "exactly where they were" as evidence the outcome was predetermined before any investigation concluded.

Section 301 requires country-specific investigations and tailored responses. The administration completed 60 investigations in two and a half months and assigned nearly identical rates to economies with completely different labor practices. The Supreme Court struck down IEEPA. The Trade Court paused Section 122. Section 301 was the last remaining workaround, and now it is in court too.

The Read

If Section 301 gets enjoined, the administration has no legally durable tariff framework remaining. The Fed is pricing 0.8 percentage points of core inflation from tariffs. A preliminary injunction changes that calculus and the September hike argument simultaneously. A ruling could arrive before September 15-16.

AI Is Driving One-Third of Recent GDP Growth. It Is Crowding Out Everything Else.

Oxford Economics calculated that AI investment is responsible for roughly one-third of recent U.S. GDP growth. Data center construction hit an annualized rate of roughly $68 billion in June, up more than $21 billion year over year. All other private construction, homes, hospitals, shopping centers, fell by roughly $102 billion over the same period.

The AI boom is not additive. It is substitutive. Every dollar going into data centers is a dollar not going into housing or commercial real estate. FactSet raised the four-year hyperscaler capex estimate by $300 billion in a single month to nearly $4 trillion through 2029. Barclays projects hyperscaler bond issuance at $285 billion this year versus $109 billion last year.

What's Moving

• Data center construction is at an annualized $68 billion, up $21 billion year over year
• U.S. imported roughly $90 billion in electronic components from Taiwan in the first five months of 2026 vs $20 billion in the same period of 2024
• ISM Manufacturing hit 55.6 Monday, its highest since May 2022, driven heavily by AI infrastructure orders
• iPhone 18 Pro may cost more because of memory chip prices. The same AI-driven crunch hitting hyperscalers

The Read

If AI capex slows, there is nothing behind it to catch the fall. Other construction is already in retreat. The household wealth effect from AI-driven stock gains is the other pillar of consumer spending. Both depend on the same trade staying intact. Nvidia reports August 26 as the first real test of whether the 2029 capex cycle holds.

Barkin Called It "a Close Call." Cook Speaks Tomorrow. The Data Fills the Gap.

Richmond Fed President Tom Barkin told the WSJ it is "a close call" whether current rates are high enough to bring inflation down. He named AI investment, nominal consumption, and healthy loan demand as evidence rates may not be as restrictive as assumed. He does not vote until next year, but his language extends the hawkish framework Hammack, Kashkari, and Logan built publicly.

Williams held the dovish line Monday. Cook speaks mid-week. She is the first Washington-based governor to speak since the meeting. Seven governors need to move for September to happen. ADP and ISM Services print the same day Cook speaks. Payrolls land Friday.

The Read

Data arrives before officials comment on it. If ADP and ISM Services both come in hot, Cook's speech becomes an immediate test of whether the governor bloc absorbs that hawkishly or holds the dovish framework. A hot data day followed by a Cook hawkish pivot would be the most consequential Fed signal since Warsh's press conference.

Trump named Chevron's CEO and called for lower prices. Palantir confirmed AI software monetization at 149%. Twenty-five AGs challenged the last standing tariff framework. AI is one-third of GDP and crowding out everything else. Every Fed official is publicly taking sides before Cook speaks tomorrow.

SpaceX reports after the close. The data week starts in earnest tomorrow.