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U.S. stocks barely budged after a two-day rally that pushed major indexes into record territory, with gains trimmed as several large technology firms retreated. The moves matter now because investors are weighing blockbuster earnings, an unfolding Middle East conflict and a key jobs report that could shape Federal Reserve policy.
The S&P 500 slipped about 0.2% to roughly 7,723, pausing after earlier highs this week. The Dow Jones Industrial Average climbed to another record, up about 0.5% to the mid‑54,000s, while the Nasdaq fell close to 0.8%, pulled lower by weakness among big-cap tech names.
Market participants say the recent rally represented a release of pent-up momentum after a two-month lull, but profit-taking in a handful of megacap tech stocks tempered broader gains.
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Notable movers and corporate results
Quarterly reports and company-specific news drove much of the day’s volatility.
- Alphabet slid about 4% after profit-taking among large-cap tech stocks.
- Microsoft eased roughly 1.1%.
- Disney rose near 3.6% after beating profit expectations, buoyed by roughly $1 billion at the box office for “Toy Story 5” and stronger theme-park revenue.
- Booking Holdings jumped approximately 6.6% on continued travel demand that boosted sales and profits.
- SpaceX, in its first earnings report as a public company, tumbled about 13.6% after revealing a sharp increase in AI-related spending, even as it said it will rely exclusively on Nvidia chips for its AI systems.
- Nvidia received a lift, gaining around 3.4%, while Advanced Micro Devices (AMD) fell about 7% on the chip-supplier shift.
Overall, roughly three-quarters of S&P companies have reported results this quarter; Wall Street anticipates aggregate profit growth near 50% once the reporting season wraps up, a factor that has supported the market’s advance.
Markets, rates and oil
Bond yields edged lower: the yield on the 10‑year Treasury eased to about 4.61% from 4.63% late Tuesday. That slight pullback in yields provided some support for equities but did little to stop intraday swings led by tech stocks.
Oil continued to trade below recent peaks. Brent crude slipped roughly 0.1% to about $79.45 a barrel; prices have swung widely this year and briefly topped about $102 a barrel earlier in the conflict, amplifying inflation pressures and logistical costs across the economy.
Why this matters for investors
Investor focus has shifted from simply applauding heavy AI spending to scrutinizing whether those investments deliver concrete revenue and earnings. That evaluation is key for high‑valuation AI‑linked companies whose stock movements have driven much of the market’s ups and downs.
At the same time, geopolitical uncertainty tied to the U.S. conflict with Iran — and comments from President Donald Trump suggesting a possible agreement to reopen the Strait of Hormuz — continues to influence energy markets and investor sentiment.
Inflation and Federal Reserve policy remain central. The Fed has held its benchmark rate steady while monitoring price trends; markets still expect at least one rate increase before the end of 2026. Household spending has remained resilient despite higher costs, and the labor market is cooling but remains a relative strength for the economy.
Traders will be watching Friday’s employment report for July for fresh clues on growth, wages and the Fed’s next moves.
- Quick takeaways:
- S&P paused after recent record; Dow hit another high; Nasdaq fell on tech weakness.
- Corporate earnings remain the primary market driver—three‑quarters of S&P companies have reported.
- AI spending is reshaping chip demand and shifting investor attention toward actual revenue gains.
- Treasury yields ticked down; Brent crude held below recent peaks but remains volatile.
- Geopolitical developments and Friday’s jobs report could sway markets next.
Associated Press writers Elaine Kurtenbach and Mayuko Ono contributed to this report.
