U.S. stocks hovered near record highs on Wednesday as potential Middle East peace progress offset sharp losses in artificial intelligence and technology shares. The Dow Jones Industrial Average climbed to a new record, while the S&P 500 and Nasdaq edged lower following heavy corporate spending reports from SpaceX and Advanced Micro Devices.
Wall Street experienced a mixed trading session on Wednesday, with the S&P 500 falling 12.97 points, or 0.2%, to close at 7,723.55. Despite the slight dip, the index remained near record territory following a surge earlier in the week. The market’s resilience persisted even as heavyweight technology stocks faced selling pressure and investors digested the latest corporate earnings and economic data.
The coiled spring investors have been waiting for has finally released, with the S&P 500 Index surging to record highs for the first time in two months,
said Mark Hackett, chief market strategist at Nationwide, in a report cited by the AP News.
Dow Jones Reaches New Records on Middle East Diplomacy Hopes
While technology issues weighed on the broader indexes, the blue-chip Dow Jones Industrial Average rose 263.18 points, or 0.49%, to finish at 54,349.06. Market participants pointed to mounting optimism surrounding potential diplomatic breakthroughs in the Middle East as a primary driver for non-tech sectors.
A proposed deal between Iran and Oman could grant Tehran control over ships entering the Gulf through the Strait of Hormuz, according to a senior Iranian source and two regional officials cited by Reuters. The five-month conflict has periodically constricted global oil supplies and stoked inflation fears since late February. On Wednesday, the international standard Brent crude fell 0.1% to settle at $79.45 a barrel, down significantly from peaks that reached $102 per barrel earlier in the conflict.
President Donald Trump indicated that an agreement to reopen the Strait of Hormuz could arrive as early as Wednesday, though energy markets have weathered multiple false starts throughout the standoff.
It’s just a straight rocket shot that we’ve gone up, we didn’t even take a breath,
said Kenny Polcari, chief market strategist at Slatestone Wealth in Jupiter, Florida, Reuters. It’s progress, but the market’s just going, we’re not going to give it to you this time until we actually see the progress, because how many times have we been jerked around over the last four months?
SpaceX and Advanced Micro Devices Drag Down Nasdaq
The tech-heavy Nasdaq Composite dropped 221.55 points, or 0.83%, to 26,363.44, marking its first decline in five sessions. Semiconductor and space infrastructure equities bore the brunt of the selling.
Elon Musk-led SpaceX saw its shares tumble 13.6% following the release of its inaugural quarterly earnings report as a public company. While revenue nearly doubled and operating losses narrowed—bolstered by Starlink satellite communications and artificial intelligence operations—investors grew anxious over escalating capital expenditures directed toward AI data centers. Additional selling pressure could materialize following the expiration of the company’s post-IPO lock-up period.
Advanced Micro Devices similarly retreated, falling 7% despite issuing quarterly revenue forecasts that beat Wall Street estimates. Analysts noted that investors are demanding clearer proof that massive capital outlays on artificial intelligence will yield accelerated revenue growth. Conversely, rival Nvidia gained 1.9% after SpaceX announced plans to use its hardware exclusively for building its data centers.
Broader Earnings and Labor Market Signals
Outside of technology, corporate reports remained broadly positive. The Walt Disney Co. rose 3.6% after surpassing profit expectations, aided by a $1 billion box office return for Toy Story 5
alongside theme park revenues. Amgen shares gained 4.6% after reporting a 9% increase in second-quarter sales, while Eli Lilly climbed 4.9% following a raised full-year revenue outlook.
Economic indicators released during the week pointed to a stabilizing labor environment. Private payrolls growth slowed in July, according to the ADP national employment report, preceding the official government employment figures scheduled for release on Friday. Meanwhile, the Institute for Supply Management reported that its non-manufacturing purchasing managers index edged up to 54.1 in July from 54.0 in June.
Federal Reserve officials continued assessing monetary policy in light of sticky price pressures. Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that he believes conditions warrant slowly moving interest rates higher. Kansas City Fed President Jeff Schmid noted that some monetary policy tightening remains necessary to guide inflation back to the central bank’s 2% target. CME FedWatch data indicated that traders are pricing in a 54.9% probability of a rate hike at the September Federal Open Market Committee meeting.
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