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Palantir Technologies (PLTR) shares surged 10% in intraday trading Thursday after the company announced an agreement with Microsoft (MSFT) to provide the U.S. government with secure cloud, artificial intelligence (AI), and analytics capabilities for national security. Microsoft shares also gained.

The companies said the U.S. defense and intelligence community, which includes government organizations like the Central Intelligence Agency (CIA) and military intelligence agencies, will have access to Palantir and Microsoft's AI and cloud tech for national security missions.

The agreement provides the U.S. government agencies with large language models (LLMs) through Azure OpenAI Services, Microsoft's cloud offerings through its partnership with OpenAI, and Palantir's AI Platform (AIP).

Palantir has existing contracts with the U.S. government, including a contract with the U.S. Army focused on AI and machine learning.

“Bringing Palantir and Microsoft capabilities to our national security apparatus is a step change in how we can support the defense and intelligence communities,” Palantir CTO Shyam Sankar said.

The new government offering could strengthen the relationship between Palantir and Microsoft. The companies didn't disclose financial terms of the agreement.

Palantir shares were up 10% to $28.96 around 3 p.m. ET Thursday following the news, while Microsoft shares were up close to 1% at $402.12.

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Beleaguered homebuyers saw a bit of relief this week when mortgage rates slipped to their lowest levels in more than a year.

Data from government mortgage backer Freddie Mac showed that the average 30-year, fixed-rate mortgage was 6.47% as of Aug. 8, a drop of more than a quarter-percentage point from the prior week.

This week's decline was the steepest one-week drop since December, and it lowered home borrowing costs to levels not seen since May 2023. The 15-year, fixed-rate mortgage showed similar declines, falling nearly four-tenths of a percentage point to hit 5.63%, the lowest rate since April 2023.

The sudden drop in mortgage rates followed a disappointing jobs report that shook financial markets, sparking a major selloff and igniting speculation about when and how aggressively the Federal Reserve will begin cutting interest rates.

“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing," said Sam Khater, Freddie Mac chief economist. 

However, the slump may not last long. Mortgage rates are influenced by the 10-year Treasury yield, which tumbled on Monday to its lowest level in more than a year but has since rebounded. According to Zillow data analyzed by , 30-year rates inched up in recent days to 6.49%.

The data comes as economists and real estate professionals have been searching for good news about the housing market. High mortgage rates have not only priced many buyers out of the market, but also kept many homeowners from moving, giving homebuyers fewer options and keeping prices elevated. 

"The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move,” Khater said. 

The data from Freddie Mac squared with a recent report from the Mortgage Brokers Association, which showed that refinancing surged last week as rates dropped. Freddie Mac’s data also showed homeowners were acting to refinance on the lower rates. 

“This drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42 percent, the highest since March 2022,” Khater said.

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