Palou, Lundgaard and Herta all pit over the last few laps with no position change.
A really strong day from Dixon from 19th to fourth - he pits and gives O'Ward his position and drops back into 10th.
After a battle with Malukas that started in the final turn and ended at Turn 2, Siegel found himself fighting Sting Ray Robb into Turn 3 and was pushed off by Robb. He lost a further position to Kyle Kirkwood.
This is a perfect afternoon so far for Palou who leads by seven seconds over Lundgaard with O'Ward in fifth and 26 seconds behind.
He will be very quick at the end so it will be a big job for Lundgaard to defend.
His wheel nut rolled down the pitlane - luckily his front mechanic had a spare ready to go.
Scott Dixon is running a great race in fourth - he started in 19th.
Lundgaard has made the undercut work and passes Herta on track. He sits in second.
Palou and Herta lead by over 15 seconds. Both pit at the same time and both put on old reds.
He goes onto hard tyres after pitting from third. This promotes Rasmussen onto the podium.
Christian Lundgaard comes back onto track in seventh while O'Ward is in 10th.
He came out just in front of Callum Ilott who had been in front before he had pitted himself. He's really pushing to stay in front on his new hards.
He goes onto hards - he might be able to undercut Lundgaard but imagine both him and Herta will pit soon.
O'Ward doesn't look that quick right now with Newgarden looking ready to get through should the moment be put before him. This would drop him to fifth while his championship rival, Alex Palou, leads.
The alternate strategy cars have now filtered back down to the bottom for now which means Palou leads followed by Herta and Lundgaard.
The alternate strategy cars are now struggling to stay with the cars around them.
He drops back into 21st.
Great move by Palou who makes a wonderful move around the outside.
Palou is closely stalking Siegel now - expect him to breeze past in a moment.
A great performance from Callum Ilott so far who has moved up 20 places thanks to an early pitstop and help from Cautions. He sits in fourth.
He has just under a second on Palou. Scott Dixon sits in third. The alternate strategy is looking good for the time being.
Lundgaard has breezed by O'Ward on restart for sixth. No papaya rules in Laguna Seca.
Palou is in second - big slide from Siegel on green flag but holds onto first. This is the first time he has led the field.
Kyle Kirkwood gave a big smack to Rinus VeeKay from behind which sent him off.
Herta came out of the pits just in front of O'Ward and just as the McLaren driver looked ready to make a move, the caution was called. Strange they left it so long.