US stocks hovered near flat on Wednesday as investors held back ahead of Alphabet and Tesla earnings, the first Magnificent Seven megacaps to report. Chip stocks lifted the benchmarks while software names and other megacaps dragged, and a jump in oil prices sharpened worries about inflation.
The S&P 500 edged up 2.61 points, or 0.03%, to 7,511.46 at 2 p.m. on Wednesday, while the Nasdaq Composite slipped 75.47 points, or 0.29%, to 25,761.74. The Dow Jones Industrial Average added 90.16 points, or 0.17%, to 52,312.64, leaving the major indexes close to unchanged as technology stocks traded mixed.
That pause follows months of gains that carried the indexes off their March lows. Momentum has wobbled since, with uneven trading in heavyweight semiconductor stocks and weakness across software names.
Big Tech earnings put the AI rally on trial
Investors were waiting on second-quarter results from Alphabet and Tesla, the first Magnificent Seven megacaps to report after the bell, for evidence that their multibillion-dollar AI spending is paying off. Alphabet shares were up 0.3%, and the company faces scrutiny after a delay in launching a model central to its AI ambitions.
eToro’s Bret Kenwell said good reports alone are no longer enough: “Good reports right now are not good enough. They need to be great.” Companies now have to prove they deserve a premium valuation, he added.
Chips rise as software and megacaps drag
The Philadelphia SE Semiconductor index rose 1%, bouncing off early losses and angling for a third straight day of gains after three days of losses confirmed it was in a bear market last week. Chipmakers Nvidia, Broadcom and Advanced Micro Devices supported the S&P 500 information technology sector, which was last up 0.05%, while the software and services index fell 2.9%.
Super Micro Computer jumped 21% after the server maker said it had secured more than $60 billion in new orders in the fourth quarter. Peers Dell Technologies and Hewlett Packard Enterprise climbed about 10% and nearly 5%. Microsoft, Amazon, Apple and Meta Platforms were the biggest drags on the S&P 500.
Oil surge revives inflation worries
Oil prices climbed to near six-week highs, complicating the outlook for central bankers as Middle East fighting kept key energy shipping chokepoints in focus. Schwab’s Kevin Gordon said the run in oil was helping drive the market and fanning fresh inflation worries.
The Federal Reserve is expected to hold interest rates steady for the rest of 2026, according to the median forecast in a Reuters poll of economists. Those respondents still saw an elevated risk of a rate hike. Traders were pricing in a more than 68% chance the Fed leaves rates unchanged at next week’s meeting, according to CME Group’s FedWatch tool.
Source: Investing.com
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