US STOCKS-Wall St edges higher with earnings deluge in spotlight; Palantir soars

By Pranav Kashyap and Twesha Dikshit

Feb 3 (Reuters) - Wall Street's main indexes rose on Tuesday as Palantir's results aided optimism around the AI trade, while investors geared up for a flood of corporate results through the week.

Palantir Technologies PLTR.O jumped 8.6% after upbeat results highlighted demand for its military-grade AI tools, with U.S. defense spending helping lift quarterly sales.

Teradyne TER.O rose 7.8% after the chip-testing equipment maker issued a strong first-quarter forecast, riding a separate wave of AI-linked investment as big tech pours multibillion-dollar sums into data-center expansion.

"(Palantir) earnings definitely have helped revive the AI trade this morning," said John Campbell, senior portfolio manager, Allspring Global Investments.

Alphabet GOOGL.O rose 0.8% after notching a record high in the previous session, while Amazon AMZN.O added 0.6%. Both the "Magnificent Seven" heavyweights are due to report later this week, offering investors another read on the race to commercialize artificial intelligence.

Advanced Micro Devices AMD.O and server maker Super Micro Computer SMCI.O, both due to report after the market close, were higher. The Philadelphia SE Semiconductor Index .SOX rose 0.7%.

"We've got kind of an expensive market and expectations are really high. So there are many areas of the market, especially around AI, that are somewhat priced for perfection. That's just got us in a little bit of a skittish environment," Campbell added.

Earnings from the biggest technology companies have underscored a growing investor focus on payback from soaring capital expenditure plans. Spending on AI-related infrastructure has climbed sharply, putting pressure on companies to translate investment into measurable returns that can support lofty valuations.

Meanwhile, Walt Disney DIS.N on Tuesday named theme parks head Josh D'Amaro as CEO, placing a longtime insider at the helm and ending succession uncertainty. The company's shares dipped 1.2%.

At 9:33 a.m. ET the Dow Jones Industrial Average .DJI rose 0.24%, to 49,528.50, the S&P 500 .SPX gained 0.07%, to 6,981.15 and the Nasdaq Composite .IXIC gained 0.12%, to 23,621.33.

EARNINGS DELUGE

With one quarter of the S&P 500 set to report quarterly results this week, analysts expect companies to have grown their earnings nearly 11% in the December quarter, up from an estimate of about 9% at the start of January, according to LSEG data.

PayPal PYPL.O forecast 2026 profit below estimates, sending its shares falling 17.3%.

Pfizer PFE.N shares fell 4.4% despite posting fourth-quarter profit above estimates, while Merck's MRK.N shares rose 3% after quarterly results.

PepsiCo PEP.O shares gained 1.7%, with the brand announcing a price cut on core brands such as Lay's and Doritos.

Chipotle Mexican Grill CMG.N, Cadbury maker Mondelez MDLZ.O and household products maker Clorox CLX.N are scheduled to report after the bell.

On the macro front, the House of Representatives will try to pass a deal later in the day to end the latest shutdown that has again thrown economic releases off schedule, delaying the closely watched January jobs report that had been due on Friday.

Tuesday's JOLTS report has also been postponed.