4:15pm: Earnings loom
US stocks ended mostly lower on Wednesday as investors took a breather after two strong sessions, with rising oil prices and caution ahead of a wave of closely watched earnings keeping buying in check.
The Dow Jones finished little changed, slipping 6 points to 52,219. The S&P 500 fell 10 points, or 0.1%, to 7,499, while the Nasdaq underperformed, dropping 146 points, or 0.6%, to 25,691.
Trading was uneven throughout the session as investors stepped back from the artificial intelligence and semiconductor stocks that had powered the market's recent rebound. After two days of solid gains, traders appeared content to lock in profits while waiting for the next major catalyst.
Attention now shifts to a busy slate of earnings due after the closing bell, led by Tesla and Alphabet, whose results are expected to provide fresh insight into both AI spending and consumer demand. IBM, ServiceNow, Southwest Airlines and Wyndham Hotels & Resorts are also scheduled to report, adding to what is shaping up to be one of the busiest weeks of the earnings season.
Meanwhile, higher oil prices added another layer of caution to the market, raising concerns that persistent strength in energy could complicate the inflation outlook.
3:40pm: Proactive news headlines
- Custom Health Holdings Inc (TSX:CHLT) signed a binding letter of intent to acquire Evergreen Pharmacy in a US$3.5 million deal expected to add more than US$78 million in annual revenue.
- Varon Corp (OTCID:OZSC) announced that its Ballislife Drink joint venture signed a multi-year exclusive agreement to distribute Ballislife HYDRO Sports Drink across Canada, beginning with a C$100,000 purchase order.
- Aftermath Silver Ltd (TSX-V:AAG, OTCQX:AAGFF, FRA:FLM1) has launched new drilling programs at its Berenguela project in Peru and its Challacollo project in Chile to expand copper, silver and gold mineralization.
- Snail Inc (NASDAQ:SNAL) said it will attend Gamescom 2026 in Germany, where it plans to showcase its growing game portfolio and unveil a previously undisclosed title.
- TNR Gold Corp (TSX-V:TNR, FRA:TNW, OTC:TRRXF) announced that Altius Minerals increased its strategic stake in the company by purchasing an additional 7.435 million shares, bringing its total holdings to about 30.94 million shares.
2:30pm: Market movers
- Super Micro Computer Inc (NASDAQ:SMCI) shares surged about 20% after the AI server maker reported stronger-than-expected preliminary fourth-quarter gross margins and a record order backlog.
- AT&T Inc (NYSE:T, XETRA:SOBA) shares rose 4.3% after the telecom company reported second-quarter earnings that beat expectations, supported by strong postpaid phone and broadband subscriber growth.
- Oatly Group (NASDAQ:OTLY) shares jumped 29% after the oat drink maker reported stronger second-quarter revenue, improved margins, progress toward profitability and raised its full-year revenue outlook.
- Pegasystems shares fell about 15% after the enterprise software company reported second-quarter earnings and revenue that missed Wall Street expectations.
- GE Vernova shares declined about 6.4% after widening losses in its wind business overshadowed better-than-expected quarterly revenue and record order growth.
- Custom Health Holdings Inc (TSX:CHLT) signed a binding letter of intent to acquire Evergreen Pharmacy in a US$3.5 million deal expected to add more than US$78 million in annual revenue.
- Rocket Lab USA Inc (NASDAQ:RKLB) shares gained about 3% after the company secured a US$266 million contract from the US Air Force and US Space Force to provide suborbital launch services.
- Varon Corp (OTCID:OZSC) announced that its Ballislife Drink joint venture signed a multi-year exclusive agreement to distribute Ballislife HYDRO Sports Drink across Canada, beginning with a C$100,000 purchase order.
- Aftermath Silver Ltd (TSX-V:AAG, OTCQX:AAGFF, FRA:FLM1) has launched new drilling programs at its Berenguela project in Peru and its Challacollo project in Chile to expand copper, silver and gold mineralization.
1:00pm: And then there's Alphabet
Alphabet Inc (NASDAQ:GOOG) (Alphabet Inc (NASDAQ:GOOG)) reports second-quarter results after Wednesday's close, with Wall Street bracing for a print that could either validate the company's AI spending spree or intensify investor unease about it.
Bank of America is firmly in the bullish camp, reiterating its Buy rating and raising earnings estimates ahead of the print. The bank projects revenue of $102.1 billion and EPS of $8.38, both well above Street consensus of $101 billion and $2.90.
Much of that EPS gap traces to an estimated $80 billion boost to operating income from the revaluation of Alphabet's stake in Anthropic, whose valuation climbed from $380 billion in the first quarter to $965 billion in the second.
Capital spending remains the swing factor. Alphabet already guided full-year 2026 capex to $180 billion to $190 billion, and Bank of America thinks that range could climb another 5%, to $190 billion to $200 billion, given accelerating AI demand and rising memory costs.
12:05pm: Tesla's question mark
Tesla Inc (NASDAQ:TSLA) (Tesla Inc (NASDAQ:TSLA)) reports second-quarter results after the bell Wednesday, and the numbers investors already have in hand tell a split story: a blowout on deliveries, a question mark on spending.
The bigger debate on the call is likely to center on what Tesla is doing with its money, and its robots. The company set aside a $25 billion capital budget for 2026 to fund AI infrastructure and Optimus development, a spending pace analysts expect to push free cash flow to roughly negative $3.25 billion for the quarter.
Shares were flat Wednesday heading into the release.
11:00am: Supermicro surges
Super Micro Computer Inc (NASDAQ:SMCI) (Super Micro Computer Inc (NASDAQ:SMCI)) shares opened about 20% higher on Tuesday after the company released preliminary fourth quarter fiscal 2026 results showing significantly stronger-than-expected gross margins and a record order backlog, despite revenue tracking near the low end of its guidance.
The AI server maker said revenue for the quarter ended June 30 is expected to be near the lower end of its previously issued guidance range of $11.0 billion to $12.5 billion. Wall Street analysts had been expecting revenue of about $11.73 billion.
The company also reported receiving more than $60 billion in new orders during the quarter, lifting its backlog to a record level at the end of fiscal 2026. Supermicro said the orders are expected to be delivered over future quarters.
10am: Dow opens higher, Nasdaq hit by semis selling
There has been another uneven open on Wall Street, with investors selling out of technology stocks ahead of key earnings from Alphabet and Tesla after the close.
The Dow Jones has opened up 225 points, or 0.4%, while the Nasdaq fell 0.2%, with the S&P 500 oscillating around the flatline.
Industrial and defensive names led the Dow gains, with Honeywell, Verizon, 3M and Chevron the top risers.
Meanwhile, the Nasdaq's fall resulted from declines in semiconductor and AI-linked stocks, with AppLovin, SanDisk, Workday, Palantir and Lam Research leading falls as investors take profits after the rally yesterday.
An exception is Super Micro Computer, which jumped over 20% after the company released preliminary results showing significantly stronger-than-expected gross margins and a record order backlog, despite revenue tracking near the low end of its guidance.
8.10am: Tech stocks to see Wall Street open lower
Wall Street stocks looked set for a weaker open on Wednesday as investors lock in profits in technology stocks ahead of crucial earnings from Google owner Alphabet and Tesla, while escalating tensions in the Middle East push oil prices to six-week highs.
Dow Jones futures were down 0.2%, while the S&P 500 was called 0.4% lower and the hardest hit is expected to be the Nasdaq, where futures have dropped 1%, with chipmakers leading the pre-market declines after a sharp rebound in the previous session.
The cautious mood follows a strong rally the day before, when the Dow Jones rose 380 points, or 0.7%, to 52,443, the S&P 500 gained 0.9% to 7,546, and the Nasdaq climbed 1.3% to 29,316, helped by a powerful recovery in semiconductor stocks after weeks of heavy selling.
Earnings from Alphabet and Tesla are due after the bell, with analysts seeing these as key tests for the artificial intelligence trade.
Markets will be watching Alphabet for updates on AI-related capital spending and monetisation, while Tesla's results are expected to provide fresh detail on autonomous driving, robotics and vehicle demand.
Results from Texas Instruments, IBM and ServiceNow will also be closely watched in the evening, while Philip Morris, GE Vernova and AT&T report before the opening bell.
Chip stocks were under pressure in pre-market trading as investors took profits following a 5.5% jump in the sector the previous session.
Semiconductor stocks have been under heavy pressure in recent weeks as hedge funds aggressively unwound crowded AI trades, driving the sector around 25% below its early June peak.
Tuesday's rebound came as "the Momo guys [momentum traders] ran out of stock to sell, so the pressure was off," said market strategist Kenny Polcari at Slatestone Wealth, suggesting the wave of forced selling may have largely run its course.
Meanwhile, Brent crude traded above $94 a barrel after another night of US strikes on Iranian targets and renewed threats to shipping routes in the Middle East from Yemen.
The stronger oil price has revived concerns that inflation could prove more persistent, complicating the Federal Reserve's policy outlook just as investors had begun to scale back expectations of further interest-rate increases.
"10 straight days of US strikes and continued attacks on military targets have kept a geopolitical premium firmly embedded in oil prices and that will become more of an issue next month and the months after," said Polcari.
There is little in the way of economic data due on Wednesday, putting more of the onus on corporate earnings and developments in the Middle East.