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• Caterpillar is expected to report third-quarter earnings before the market opens on Wednesday.
• As investors have come to see the shares as an AI play, the stock has been a top performer in 2025—leaving them "priced for perfection," according to Morgan Stanley.

A company known for its distinctive yellow construction equipment and its iconic logo has become an AI darling.

Yes, we mean Caterpillar (CAT)—which through Monday's close has the best-performing stock in the Dow, ahead of companies like Nvidia (NVDA) and Microsoft (MSFT), thanks to an AI-driven metamorphosis.

Caterpillar has lately seen stalling earnings growth in 2025, with its past two quarterly reports missing expectations. Still, its shares are up more than 45% year-to-date, more than the Industrial Select Sector SPDR Fund's (XLI) 18% gain, the S&P's 17%, and Nvidia's 38%. And when Caterpillar reports third-quarter earnings pre-market tomorrow morning, investors are likely to focus on a key driver of its future growth: data centers' surging demand for electricity.

That trend is shifting the spotlight to Caterpillar's energy and transportation segment from its construction and resources segments, which have been challenged. The latter—bulldozers, excavators, and mining trucks—will "take a backseat" as the former—backup and primary power generation sets, solar turbines, and gas pipelines—drives earnings in the coming years, according to BofA Global Research analysts, who have a "buy" rating on the stock.

The E&T segment accounts for roughly 40% of Caterpillar's sales, according to BofA. Businesses within the segment, including its power generation business, "continue to outgrow the overall business," Bank of America wrote in June. Last year, E&T chipped in about $29 billion of the company's roughly $65 billion in total sales, more than either of the construction and resources units.

Caterpillar's stock has been a beneficiary of investor penchant for AI-themed investments. Its next earnings report, due Wednesday morning, will be the latest opportunity for investors to determine whether the company's data center power-play narrative can endure.

Can the stock keep rising? Morgan Stanley analyst Angel Castillo recent said Caterpillar shares, sitting near all-time highs, were "priced for perfection." Wall Street analysts, on average, have a price target of about $497, 6% below Monday's close of $527.

More evidence of an oversupplied construction market and the firm's cautious views on non-residential construction activity, Castillo said, will put pressure on its construction segment. Without strength in other segments to offset that weakness, he said, there's the risk of negative earnings revisions.

Still, growth in E&T could be a potent mood booster. "Any amount of sequential growth is enough to keep sentiment positive," he wrote in a report last week. The firm has a bearish rating on the stock.

• Meta is scheduled to report its quarterly results after the closing bell Wednesday, with Wall Street analysts expecting growing revenues on strong gains in its ad business.
• Options pricing suggests traders expect Meta's stock could move about 6% in either direction in the days after its results.

Meta is scheduled to report its third-quarter results after the closing bell Wednesday, with traders betting on a big move in the social media giant's stock that could bring it to record highs.

Options pricing suggests traders expect Meta Platforms (META) stock could move close to 6% in either direction by the end of this week. A shift of that size from Monday's close near $751 could push shares to a new record around $796 at the high end, or drag them down to about $705, where it was earlier this month.

Meta's stock declined about 3% the day after the company reported earnings in July, and fell roughly 4% the day after results were released this time a year ago. It rose about 1.6% and 4.2%, respectively, in the days following its releases in January and April.

Anticipation of a large stock move could reflect extreme optimism or pessimism about the upcoming results, with investors likely to be looking for updates on Meta's AI plans that could boost—or shake—their confidence in the stock.

Investors will be watching closely Wednesday to see whether Meta can show the revenue gains to justify its hefty AI spending, with analysts expecting record revenues on growth in its ad business, according to estimates compiled by Visible Alpha.

Meta shares have risen 28% in 2025 so far, with Wall Street analysts widely bullish that the stock still has room to rise. The mean target of analysts surveyed by Visible Alpha near $873 would suggest roughly 16% upside from Monday's close.

• President Donald Trump and Chinese president Xi Jinping are set to meet in South Korea Thursday and hammer out a trade deal.
  
• The two countries have tentatively agreed on a framework that would defuse threats of higher tariffs and export restrictions that both countries have made in recent months.
  
• The deal is likely to represent a de-escalation of the trade war, but not settle it completely.
  

Upcoming talks between President Donald Trump and Chinese president Xi Jinping could defuse several major economic flashpoints in the trade war between the two countries.

The leaders of the world's two largest economies are expected to meet Thursday in South Korea to negotiate several disputed issues that have threatened both countries in recent months. The leaders will hammer out details of an agreement on tariffs, soybeans, rare earth minerals, and fentanyl, Treasury Secretary Scott Bessent said in television interviews this weekend, following his own meetings with his Chinese counterpart.

"I believe that we have the framework for the two leaders to have a very productive meeting for both sides," Bessent said on Meet The Press Sunday. "And I think it will be fantastic for U.S. citizens, for U.S. farmers, and for our country in general."

Thursday's trade talks could be a big step toward de-escalating economic tensions between the world's two most powerful counties.

Should the negotiations play out as Bessent indicated, they would alleviate several economic threats that have emerged in recent months as the U.S. and China have imposed tit-for-tat trade measures against one another. Stocks rose Monday on optimism that the recent trade wars would de-escalate.

Trade tensions had seriously escalated earlier this month after Chinese officials said they would restrict exports of rare earth minerals, which are used by high-tech industries all over the world, including the U.S. The minerals are necessary to make batteries, computer chips, and weapons among other products. Trump retaliated by threatening to impose triple-digit tariffs on China, on top of already high import taxes, potentially driving up costs for U.S. consumers and causing shortages of consumer products.

The extra tariffs are now likely "off the table," Bessent said on Face The Nation. He also said he expects China to issue "some kind of deferral" on its rare earth export controls.

In another sign of progress, Scott said China would likely resume buying soybeans from the U.S., potentially reinstating the number one customer for U.S. soy farmers after China halted all purchases earlier this year. China may also take action to reduce fentanyl smuggling to the U.S., which could pave the way for Trump to remove the 20% tariff he had imposed to crack down on the flow of illicit drugs.

Overall, the talks could help cool the on-again, off-again trade war between the U.S. and China that flared up this year as Trump has sought to remake U.S. trade policy. However, some experts said the talks were unlikely to settle underlying differences that drive the conflict, including the American trade deficit with China that Trump has frequently criticized, and American reliance on rare earths from China, which dominates the market for the critical materials.

"Negotiations this fall will likely yield a tenuous agreement," Dan Alamariu, chief geopolitical strategist at Alpine Macro, wrote in a commentary last week. "The recurring cycle of tension-truce-tension will persist as both powers are likely to push against each other, but still remain too economically intertwined to risk a full rupture."

• A semiconductor maker got a boost from plans to enter a key market on Monday, Oct. 27, 2025, while a decline in gold prices weighed down a major miner.
• Qualcomm stock jumped higher after the chipmaker entered the booming AI data center market with a pair of new products.
• Shares of mining giant Newmont tumbled alongside a decrease in gold prices.
  

A chipmaker's stock soared Monday after it launched new products targeting the competitive artificial intelligence data center market, while falling gold prices pressured shares of a top mining company.

Major U.S. equities indexes jumped to all-time highs, bolstered by an improving outlook for U.S.-China trade relations. The S&P 500 added 1.2%, while the Dow gained 0.7%. Strength in the communication services and tech sectors helped boost the Nasdaq, which surged 1.9%X. Click here for today's full daily market wrap-up from Investopedia.

Qualcomm (QCOM) shares surged 11%, logging the day's top performance in the S&P 500, after the chipmaker unveiled two AI accelerator chips for data centers. Entering the data center market marks a major step for Qualcomm, which has primarily concentrated on semiconductors for mobile phones, laptops, and other consumer devices.

Keurig Dr Pepper (KDP) topped revenue forecasts and matched adjusted profit estimates for the third quarter, and shares of the coffee and soft drink giant advanced 7.7%. Growth in U.S. beverage sales and benefits from the Ghost energy drink acquisition helped drive the results. The company also increased its forecast for full-year sales growth .

Tesla (TSLA) shares powered 4.3% higher Monday. Analysts at Morgan Stanley suggested that, based on comments from CEO Elon Musk about the company's robotaxi program, Tesla has effectively succeeded in its efforts to develop full self-driving technology. Cantor Fitzgerald analysts also raised their price target on Tesla stock, highlighting catalysts including the company's Semi truck, Optimus robot, and energy business.

Shares of Albemarle (ALB), the world's largest lithium producer, dropped 8.9%, losing the most of any stock in the S&P 500. Albemarle announced an agreement to sell a controlling stake in its Ketjen refining catalyst solutions business to KPS Capital Partners. Albemarle will retain a 49% stake in Ketjen, which provides products to the petrochemical and specialty chemical industries.

Gold prices tumbled Monday, pressured by the signals of easing tensions between the U.S. and China as well as strengthening in the U.S. dollar. Shares of Newmont (NEM), the world's largest gold miner, sank 5.7%.

Ford (F) stock fell 4.2%. Although the carmaker topped quarterly sales and adjusted profit forecasts in results released last Thursday, Ford cut its full-year guidance for adjusted earnings before interest and taxes in 2025, citing a $1.5 billion impact from a fire at the Novelis aluminum plant in Oswego, N.Y., that affected production of its F-150 trucks. Shares of GM (GM) and Stellantis (STLA) made comparatively modest moves today.

• Microsoft stock is expected to move about 4% by the end of the week, according to recent options pricing data, as the company gets set to release its quarterly results on Wednesday after the closing bell.
• Shares jumped to a record high following strong results in July but have been trending sideways ever since.
• Wall Street analysts are overwhelmingly bullish on Microsoft stock, which they expect to get a boost from another quarter of robust cloud computing growth.

Microsoft (MSFT) is scheduled to report quarterly results after markets close on Wednesday, and some investors expect the stock to jump to a fresh record.

Options prices suggest traders expect Microsoft shares to move about 4.4% in either direction by the end of the week. A move of that size off of Friday’s close would put shares at about $546, an all-time closing high, or about $500, their lowest price since early September. 

Microsoft, with a market capitalization of nearly $4 trillion, has more sway over the broader market than nearly every other stock. Strong results and a commensurate stock move could boost to major indexes and brighten the mood on Wall Street.

Microsoft stock has moved an average of nearly 6% following its four most recent earnings reports. In July, shares rose about 4% the day after the company reported better-than-expected earnings driven by cloud computing growth. Shares jumped more than 7% on similarly strong results in April. 

Microsoft stock has risen about 26% since the start of the year, but shares have been treading water since jumping to a record high after its July earnings report. Economic uncertainty weighed on shares throughout the first few months of the year before a string of trade deals and optimism about artificial intelligence helped lift shares into the summer. 

Analysts expect Microsoft to report another quarter of strong revenue and earnings growth. Microsoft's Azure cloud computing platform, where the company recognizes revenue from hosting AI workloads, is expected to grow 38% year-over-year.

Artificial intelligence investments will also be in the spotlight. Executives estimated capital expenditures would total $30 billion in the quarter being reported Wednesday. Bank of America analysts wrote in a note last week that an increase to Microsoft's capex guidance could give the stock a post-earnings boost.

Analysts are overwhelmingly bullish on Microsoft’s stock, with all 16 of the analysts tracked by Visible Alpha with current price targets rating the stock a “Buy.” Their average price target of about $640 represents about 20% upside from the stock’s intraday price on Monday. 

• The buy now, pay later provider Klarna plans to launch a membership program in the U.S. that it sees as an alternative to high-end credit cards like the American Express Platinum or Chase Sapphire Reserve cards.
• Its Premium and Max programs will give users access to more than a dozen subscriptions, cash back and other perks.
  

Klarna is making a play for the premium credit card segment.

The buy now, pay later (BNPL) company on Monday announced the European roll-out of alternatives to high-end credit cards, a business in which banks are competing for consumers who pay annual fees in the hundreds of dollars in exchange for access to airport lounges, restaurant perks and other benefits. Klarna (KLAR) will extend its $18-a-month Premium and $45-a-month Max membership programs to the U.S. later this year, a spokeswoman said.

“For decades, exclusive perks such as airport lounge access, concierge-style subscriptions, and premium travel insurance were only available to elite credit card holders," Klarna's chief marketing officer David Sandström said in a statement. "Through Klarna memberships, consumers can enjoy travel, lifestyle, and digital experiences in one seamless plan, without the burden of credit-based rewards or hidden costs.”

Credit card issuers are vying for the premium clientele, sweetening the suite of benefits they offer—and hiking the fees they charge to access them. Lenders are getting creative with perks, adding everything from pet insurance to discounted Nascar tickets.

Klarna and Citigroup are using a third party to give members and credit card users access to airport lounges. As companies vie for premium credit card customers by building up these sorts of benefits, airport lounges may get more crowded and less desirable. Meanwhile, Klarna's newest offering shows that it's not just the big banks that are looking to hook consumers on benefits.

American Express (AXP) quadrupled restaurant credits and enhanced other perks on its Platinum card while raising its annual fee from $695 to $895. JPMorgan Chase (JPM) made the reward system more generous for its Sapphire Reserve card while increasing annual fees from $550 to $795.

And Citigroup (C) recently launched its own premium card, Strata Elite. Like Klarna's membership offering, its doesn't come with access to the sort of branded airport lounges offered by Capital One (COF) and Chase.

Klarna's Premium membership costs nearly $220 annually and offers more than a dozen subscriptions, including to media groups, such as Condé Nast and The New York Times, the fitness and beauty company ClassPass and laundry service provider Laundryheap. Members also get 0.5% cash back when paying with Klarna Balance, a product for holding funds and making and receiving payments that is offered in partnership with WebBank, Klarna said.

The Max program costs about $540 annually. In addition to the subscriptions, Max members get travel and rental-car insurance, 1% cash back when using Klarna Balance and access to hundreds of airport lounges through LoungeKey, Klarna said.

The program is Klarna's latest attempt to get users to sign up for its take on traditional bank products. About 1.2 million Americans use Balance, which is modeled after the bank account and offered in partnership with an FDIC-insured institution.

Shares of Klarna, which went public last month, were recently up nearly 4%.

• Huntington Bancshares will pay $7.4 billion in an all-stock purchase of Cadence Bank.
• The acquisition will expand Huntington's reach in Texas, and make it the largest bank in Mississippi. The deal is the latest in a series of multibillion-dollar bank mergers.

Another bank is getting gobbled up.

Huntington Bancshares (HBAN) has become the latest financial firm to snap up a smaller bank with its planned $7.4 billion all-stock purchase of Cadence Bank (CADE). Shares of Cadence advanced about 3% Monday, while Huntington's fell 4%. The KBW Nasdaq Regional Banking Index was recently edging lower on an upbeat day for stocks broadly.

Huntington joins Comerica (CMA), PNC Financial Services Group (PNC), and Pinnacle Financial Partners (PNFP) on a list of recent multibillion-dollar financial-services deals. Comerica was bought by Fifth Third, PNC purchased FirstBank, and Pinnacle acquired Synovus.

The Huntington-Cadence deal, expected to close in the first quarter of 2026, gives Cadence investors 2.475 shares of Huntington stock for every share they own, which values Cadence shares at $39.77 based on Huntington’s Friday close. That’s a 9% premium to Cadence’s price to finish last week. 

Huntington Bancshares is expanding its footprint with a $7.4 billion planned all-stock acquisition of Cadence Bank, boosting its presence in Texas, Mississippi, Alabama, and Arkansas. The deal joins recent multibillion-dollar mergers involving Comerica, PNC, and Synovus as regional banks continue to combine.

Ohio-based Huntington said the merger with Houston- and Tupelo, Miss.-based Cadence will give it substantial deposit market shares in Dallas, Houston, and all of Texas. In addition, Huntington will become the largest bank in Mississippi and a top 10 bank in both Alabama and Arkansas by deposits.

In total, Huntington will have locations in 21 states, and 12 of the top 25 metropolitan statistical areas in the U.S. CEO Steve Steinour said the move is “an important next phase of growth” for the bank. 

Shares of Cadence Bank are 10% higher year to date. Huntington Bancshares shares are down 4% for the year.

• Major U.S. equities indexes climbed to fresh records in intraday trading Monday amid growing optimism the U.S. and China could strike a trade deal. 
• Qualcomm shares jumped after the chipmaker unveiled two new AI chips for data centers.
• Shares of Newmont and rival gold miners slid along with the price of the precious metal.

Major U.S. equities indexes climbed to all-time highs in intraday trading Monday amid growing optimism the U.S. and China could strike a trade deal. The Dow, Nasdaq, and S&P 500 all set fresh records.

Qualcomm (QCOM) was the best-performing stock in the S&P 500 after the chipmaker announced it would release two new AI chips for data centers.

Shares of Keurig Dr Pepper (KDP) also jumped after the maker of soft drinks and coffee topped earnings estimates and lifted its outlook on strong sales in the U.S. and demand for its Ghost energy drinks.

Avidity Biosciences (RNA) shares rocketed higher after Novartis (NVS) agreed to buy the biopharmaceutical company in an all-cash deal valued at $12 billion as it moves to boost its neuromuscular disease-fighting pipeline. U.S.-listed shares of Novartis edged lower.

Shares of Newmont (NEM) and rival gold miners slid along with the price of the precious metal as demand for the traditional safe haven eased with signs of improving U.S.-China trade relations.

Huntington Bancshares (HBAN) dropped after the financial firm said it would pay $7.4 billion in stock for Cadence Bank (CADE). Shares of Cadence rose.

Shares of American Water Works (AWK) slid after the water and wastewater utility said it is buying rival Essential Utilities (WTRG) in an all-stock deal valued at $12 billion. Essential Utilities shares also declined.

Oil futures gained. The yield on the 10-year Treasury note was little changed. The U.S. dollar climbed versus the yen, but lost ground to the euro and pound. Most major cryptocurrencies traded higher. 

• Qualcomm announced new chips for AI data centers on Monday.
• The move could mean more competition for leading AI chipmakers such as Nvidia and AMD. 

Qualcomm is joining the competition to supply chips for AI data centers. 

Qualcomm (QCOM), which has largely focused on chips for mobile phones, laptops and other consumer devices to date, on Monday unveiled two AI accelerator chips for data centers: the AI200, which is set for release in 2026, and the AI250, which is planned for 2027.

Shares of Qualcomm were up more than 13% in recent trading, pacing gainers in the S&P 500 and Nasdaq Composite. With Monday's gains, they've added about one-quarter of their value in 2025.

Qualcomm's expansion into the market for data center chips comes as a growing number of companies look to capitalize on booming demand for AI with products catering to data centers. The share prices of many of those companies have surged, helping power the broader stock market to record highs.

The move marks a big step for Qualcomm, which said that it will be committed to a data center roadmap with an annual cadence for major releases or updates going forward.

It could also mean more competition for leading AI chipmakers such as Nvidia (NVDA) and Advanced Micro Devices (AMD), with several analysts suggesting in recent weeks that they see Nvidia's dominant market share diminishing over time as competition and demand grows.

Shares of Nvidia were up 2.5% in recent trading amid a broader market rally, while AMD shares were up slightly after hitting an all-time high at the open.

• Strength in its U.S. soft drinks, coffee, and Ghost energy businesses boosted results at Keurig Dr Pepper.
• Keurig Dr Pepper raised its full-year constant currency sales growth guidance.
• Shares were up about 7% at midday on Monday.

Shares of Keurig Dr Pepper (KDP) gained when the soft-drink giant posted better-than-expected results and raised its outlook on strong domestic sales and the benefit from its acquisition of Ghost energy drinks.

The company behind its namesake coffee and soda products reported third-quarter adjusted earnings per share of $0.54, in line with what analysts surveyed by Visible Alpha were expecting. Revenue climbed 10.7% to $4.31 billion, beating estimates.

Keurig Dr Pepper beat third-quarter revenue expectations, fueled by strong U.S. beverage sales and the Ghost energy drink acquisition. The company is finding success with its efforts to drive domestic growth and strengthen its coffee and refreshment beverage segments.

CEO Tim Cofer said the performance was lifted by “robust growth in U.S. Refreshment Beverages and encouraging sequential progress in U.S. Coffee.” U.S. Refreshment Beverages sales increased 14.4% to $2.7 billion. U.S. coffee sales were up 1.5% to $991 million as the company boosted prices for K-Cups. The Ghost acquisition added 4.4 percentage points of volume/mix growth, the company said.

Keurig Dr Pepper now sees full-year sales growth in constant currency in the high-single-digit percent range, up from its previous forecast of a mid-single-digit percent increase.

Keurig Dr Pepper shares were up 7% in intraday trading on Monday, but remain down about 10% this year.