NEW YORK: The S&P 500 edged higher on Wednesday, while technology shares struggled for direction as investors looked ahead to the first major Big Tech earnings reports to gauge the sustainability of the AI-driven market rally.
After months of gains that lifted the major indexes from their March lows, momentum has started to wobble, pressured by uneven trading in heavyweight semiconductor stocks.
The Philadelphia SE Semiconductor index rose 1.4 percent, though it had closed lower in five of the previous 10 sessions, highlighting fragile sentiment toward the chip sector.
Investors are now looking to second-quarter results from Alphabet and Tesla, the first of the so-called “Magnificent Seven” megacap companies to report after the bell for fresh evidence that these companies’ multibillion-dollar investments in AI are paying off.
Alphabet will be under particular scrutiny after a delay in the launch of a model central to its AI ambitions intensified concerns. Its shares were flat.
“Companies have to prove not only that they are growing, but that they are worthy of a premium valuation,” said Bret Kenwell, US investment analyst at eToro.
“Good reports right now are not good enough. They need to be great. And that’s the market we’re in right now.”
Texas Instruments, also due to report after the close, ticked 1.3 percent higher.
The S&P 500 information technology sector swung between losses and gains. It was last up 0.3 percent, helped by a surge in AI-linked hardware names.
Super Micro Computer jumped 23.8 percent after the server maker said it had secured more than USD60 billion in new orders in the fourth quarter. Peers Dell Technologies and Hewlett Packard Enterprise climbed 10 percent and 5.2 percent, respectively, after Super Micro also reported upbeat preliminary results.
The broader megacap complex was weaker, with Microsoft, Amazon, Apple and Meta Platforms falling between 0.8 percent and 2.3 percent.
At 12:10 p.m. ET, the Dow Jones Industrial Average rose 190.81 points, or 0.37 percent, to 52,415.45, the S&P 500 gained 13.32 points, or 0.18 percent, to 7,522.52 and the Nasdaq Composite lost 8.42 points, or 0.03 percent, to 25,828.26.
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