Stocks Churn Before Big-Tech Earnings as Oil Jumps: Markets Wrap
(Bloomberg) — Wall Street investors bracing for the start of the big-tech earnings season sent stocks wavering while worries about an escalation of the Iran war boosted oil prices.
Losses in most megacaps weighed on the S&P 500, offsetting a rebound in chipmakers that saw Nvidia Corp. climbing 3%. Software firms got hit again. With AI spending skyrocketing, traders are looking for Alphabet Inc.’s results to demonstrate a clear return on its massive investments. Tesla Inc. and International Business Machines Corp. are also due to report later Wednesday.
The AI euphoria that sent stocks to record highs a month ago has waned, and pressure is building for companies to justify their expenditures. A gauge of the Magnificent Seven giants is lagging the S&P 500 in 2026, a rarity for the group that had led the market higher for most of the past four years.
Investors are increasingly focused on the durability of AI-related capital expenditures, particularly after the semiconductor sector’s strong rally began to lose momentum in recent weeks, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.
“We remain constructive on AI’s growth story, but we favor a more balanced exposure across the AI value chain — from semiconductors and hardware to megacap tech and more defensive areas of the industry,” she said. “Investors should also ensure diversification beyond AI.”
Traders continued to monitor geopolitical developments. The US and Iran signaled they aren’t ready to return to the negotiating table after both countries escalated attacks. Brent oil briefly topped $95, lifting bond yields on concerns about inflationary pressures.
President Donald Trump vowed on social media that the US “will bomb and destroy ONE BRIDGE OR POWER PLANT,” including those around Tehran, any time Iran’s military “shoots at a ship in the Strait of Hormuz.”
If the US attacks bridges or power plants, “Iran will strike infrastructure and bridges in the region, including energy facilities in which the US has interests,” Tasnim news agency reported.
“Diplomatic efforts to end the conflict in the Middle East have effectively stalled as military strikes continue with no sign of easing,” said Ian Lyngen at BMO Capital Markets. “The rally in energy continues to weigh on the Treasury market as hostilities between the US and Iran intensify.”
The escalation in the conflict has also raised concerns about higher interest rates. Just a week before the Federal Reserve’s policy meeting, money markets indicate traders see a roughly 30% chance the Fed will hike and a 70% chance it will stay on hold.
Corporate Highlights:
Advanced Micro Devices Inc. has agreed to invest up to $5 billion in Anthropic PBC as part of a potential multi-gigawatt deployment of chips for the AI startup. OpenAI said its advanced AI models inadvertently hacked Hugging Face Inc. in an “unprecedented” incident that prompted fresh calls for curbs on the technology. Super Micro Computer Inc. issued preliminary results saying its backlog hit a record on new orders in the quarter of more than $60 billion. AT&T Inc. added more monthly wireless phone subscribers than analysts expected in the second quarter, a bright spot for the carrier in a period that had investors spooked by potential competitive threats. Philip Morris International Inc. reported a boost in demand for its smoke-free products, even as it trimmed its profit forecast on adverse currency conditions. GE Vernova Inc.’s higher revenue outlook failed to impress investors, a sign that it’s getting harder for companies that sell equipment to data centers to meet the market’s sky-high hopes. What Bloomberg Strategists Say…
“Beyond the headline earnings, investors are laser-focused on hyperscalers’ returns on their ever-rising AI capex, which will help shape the market reaction to the quarterly results.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 2:30 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average rose 0.1% The MSCI World Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1410 The British pound was little changed at $1.3372 The Japanese yen was little changed at 163.13 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $65,817.48 Ether rose 0.4% to $1,930.5 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.65% Germany’s 10-year yield was little changed at 3.17% Britain’s 10-year yield was little changed at 5.03% Commodities
West Texas Intermediate crude rose 3.2% to $87 a barrel Spot gold rose 1.4% to $4,134.55 an ounce ©2026 Bloomberg L.P.
