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.
No Caution is out just yet but Palou and herta jump into the pits to cover off O'Ward.
He's out on softs. Will Herta react? O'Ward comes out in 13th.
Both McLaughlin and Rahal have pitted in reaction to Malukas - they have both come out in front but Malukas has the pace advantage and gets through on McLaughlin.
He takes off his hard tyres for softs.
Scott Dixon has passed VeeKay for 15th. He is the lead car out of the drivers who have already pitted.
David Malukas ran wide out of T5 which has allowed both Rahal and Scott McLaughlin to have a sniff at his seventh place.
Graham Rahal has begun to catch back up to David Malukas after he was shouldered off by the AJ Foyt driver before the last Caution.
He looks quicker but unable to get through on him.
He has blistering pace right now. O'Ward needs to get through on Herta if he wants to catch.
Palou leads once more but O'Ward looks closer to Herta on restart.
Cars lower down the grid such as Scott Dixon, Kyle Kirkwood, and Nolan Siegel take their first pits.
He's very wide at the corner, its being theorised it could be a stuck throttle.
The Dayle Coyne Racing driver is out. This all happened at Turn 2.
Caution is back out with Abel spinning off into the barriers.