* Indexes up: Dow 1.22%, S&P 0.58%, Nasdaq 1.16%

* S&P 500 hits first intraday high since June

* Palantir ( PLTR ) up after raising annual revenue forecast

* Caterpillar ( CAT ) rises after reporting higher Q2 profit

(Updates for market open)

By Johann M Cherian and Shashwat Chauhan

Aug 4 (Reuters) - The S&P 500 and the Dow hit record highs

on Tuesday after strong forecasts from Caterpillar ( CAT ) and Palantir ( PLTR )

reassured investors about AI-driven demand, while hopes for an

imminent deal to end the Middle East conflict sent crude prices

lower.

Palantir Technologies ( PLTR ) gained 17.4% after raising

its annual revenue forecast again, while chipmaker On

Semiconductor added around 1% after forecasting quarterly

revenue above expectations.

Caterpillar ( CAT ), seen as a bellwether for the global

industrial economy, gained 12% after raising its annual revenue

growth forecast, benefiting from a buildout of AI data centers

that has spurred demand for its power-generation and

construction equipment.

Investors have been scrutinizing results from AI-linked

companies this earnings season for signs that their

billion-dollar investments are yielding returns. Strong results

from AI leaders Microsoft ( MSFT ) and Amazon ( AMZN ) last week

were a relief and have underpinned gains on Wall Street

following a turbulent July.

"The AI earnings performance has been fantastic, but the big

question that investors are asking themselves now is that if

it's going to be sustainable," said Eric Parnell, chief market

strategist at Great Valley Advisor Group.

"And if it's sustainable, we're going to have to start to

separate the winners from the losers."

In geopolitics, crude prices fell over 2% after a Qatari

official said efforts to secure a diplomatic resolution to the

conflict were continuing, while U.S. Treasury Secretary Scott

Bessent said a deal with Iran to reopen the Strait of Hormuz

could come as soon as Tuesday or Wednesday.

At 9:35 a.m. ET, the Dow Jones Industrial Average

rose 647.09 points, or 1.22%, to 53,825.50 to hit all-time

highs. The Nasdaq Composite gained 304.36 points, or

1.16%, to 26,213.57.

The S&P 500 gained 44.06 points, or 0.58%, to

7,644.56, hitting its first record high since June.

Chip stocks were on a tear, with the Philadelphia

Semiconductor index up around 4%. Shares of top

hyperscalers, though, were mixed, with Alphabet and

Microsoft ( MSFT ) down slightly early on.

Tech strength was offsetting broader losses on the benchmark

S&P 500, as seven of the 11 S&P sectors were trading lower.

Energy led losses with a 2.5% decline.

Overall, this earnings season has so far been better than

historical standards. Of the 304 companies in the S&P 500 that

have reported second-quarter earnings as of Friday, 85.2% have

beaten estimates, versus the long-term average of 67.5%.

Elon Musk's SpaceX will release its first earnings

report since its public debut after markets close. The company's

shares were up 4.4%.

Shares of U.S. photonic firms Coherent and Lumentum ( LITE )

added 14% and 7.8%, respectively, after Reuters

reported the Trump administration is drafting a ban on U.S.

imports of new models of Chinese data center components.

McDonald's inched 1.2% higher despite reporting

disappointing results, while Pfizer ( PFE ) dipped 1% after its

quarterly results.

Later in the day, the focus will shift to the Labor

Department's Job Openings and Labor Turnover Survey, scheduled

at 10 a.m. ET, which is expected to show the economy created

about 7.4 million jobs in June, lower than the 7.6 million in

the month before.

Advancing issues outnumbered decliners by a 1.36-to-1 ratio

on the NYSE and by a 2.04-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and two new lows,

while the Nasdaq Composite recorded 31 new highs and 18 new

lows.