US stocks opened lower on Wednesday as weakness in semiconductor stocks and higher oil prices weighed on investor sentiment ahead of a crucial day of corporate earnings led by Alphabet, Tesla and other major technology companies.
The Dow Jones Industrial Average gained 78 points, or 0.15%. The S&P 500 declined 0.12%, while the Nasdaq Composite dropped 0.46%.
Markets are entering a pivotal phase of the second-quarter earnings season, with investors looking for evidence that large technology companies are generating returns from their multibillion-dollar investments in artificial intelligence after months of AI-driven gains across Wall Street.
Alphabet and Tesla earnings take center stage
Investor attention is firmly focused on earnings from Alphabet and Tesla, the first of the so-called Magnificent Seven companies to report results this earnings season.
Alphabet’s results are expected to receive particular scrutiny following the delay of a key Gemini AI model, which has raised questions about the company’s AI strategy and its ability to compete in the rapidly evolving artificial intelligence market.
Alphabet shares were almost unchanged after market open, trading 0.03% higher.
Technology companies reporting after Wednesday’s closing bell also include Texas Instruments, International Business Machines and ServiceNow.
Investors are expected to closely monitor commentary on artificial intelligence spending, cloud demand, enterprise technology budgets and expectations for the second half of the year.
The earnings reports are widely viewed as an important test of whether continued investment in AI infrastructure and software can justify elevated technology stock valuations.
Semiconductor stocks came under renewed pressure ahead of the reports. The iShares Semiconductor ETF (SOXX) fell 1.2% in trading, while Texas Instruments slipped 1.56%.
Rising oil prices add to market caution
Markets also continued to monitor developments in the Middle East, where geopolitical tensions pushed oil prices to their highest levels in more than a month.
Brent crude climbed about 3% to trade above $94 per barrel after briefly moving above $95, while West Texas Intermediate crude rose roughly 3% to above $86 per barrel.
The gains followed the 11th consecutive round of US strikes against Iran, while tensions surrounding shipping routes remained elevated after continued threats from Yemen’s Iran-backed Houthi militia.
Higher energy prices have renewed concerns that inflation could remain elevated, potentially complicating the Federal Reserve’s policy outlook.
According to the latest Reuters poll, economists expect the Federal Reserve to leave interest rates unchanged for the remainder of 2026, although many also see an elevated risk of future rate increases.
CME FedWatch data showed traders assigning more than a 70% probability that the Fed will leave rates unchanged at next week’s meeting. However, traders were also pricing in a 70% chance of at least a quarter-point rate increase in September.
Super Micro jumps as earnings season gathers pace
Corporate earnings continued to generate notable stock moves ahead of the market open.
Super Micro Computer surged 14% in trading after the AI server manufacturer announced it had secured more than $60 billion in new fourth-quarter orders and forecast gross margins above its previous expectations.
AT&T also gained 4% after reporting stronger-than-expected wireless subscriber additions during the second quarter.
As earnings season accelerates, investors remain focused on whether strong demand for AI infrastructure, cloud services and enterprise software will continue to support corporate growth and broader market valuations amid persistent geopolitical and macroeconomic uncertainty.
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