S&P 500 inches higher in choppy trading as investors await pivotal earnings

The benchmark S&P 500 edged higher in a choppy session on Tuesday, as gains in other sectors offset a decline in chip stocks ahead of key earnings reports from some of Wall Street's "Magnificent Seven" companies. Global markets have become increasingly volatile this month as investors scrutinize the need for more corporate spending on AI infrastructure such as semiconductors that underpinned strong gains in chip stocks in the previous quarter. Reflecting the volatility on Tuesday, the tech-heavy Nasdaq was trading off session lows after hitting levels last seen in late April earlier in the session. Chip majors such as Micron MU.O slid 8.8%, Intel INTC.O shed 4.6%, while Nvidia NVDA.O wobbled and was last up 1%. SanDisk SNDK.O fell 13%, while Dell DELL.N and Seagate STX.O lost over 10% each. The Philadelphia SE Semiconductor Index .SOX was down 3.5%, while Roundhill's Memory Exchange Traded Fund DRAM.N fell 7.2% to an over two-month low. Signs that Wall Street's biggest companies such as Alphabet GOOGL.O and Tesla TSLA.O are running out of cash to fund their ambitions have also made markets nervous, while China showcases cheaper AI models and deepens its presence in the competitive semiconductor industry. "Investors are becoming less willing to reward higher AI spending on its own and are increasingly looking for progress in earning a return on that investment," Brian Therien, a senior analyst at Edward Jones, said. When AI hyperscalers Amazon.com AMZN.O, Meta META.O, Apple AAPL.O and Microsoft MSFT.O report earnings later this week, investors will be keen to see if their investments, worth over several hundred billion dollars, are yielding returns. Concerns have also been compounded by AI companies striking a slew of circular deals, such as the report on Nvidia NVDA.O providing roughly $250 billion in financing guarantees for OpenAI as part of a massive data center project. Investors instead favored more cash-laden tech companies. Apple AAPL.O rose 0.8%, sending its market capitalization briefly above $5 trillion for the first time and making it only the second company ever to achieve that milestone after Nvidia. At 12:10 p.m. ET, the Dow Jones Industrial Average .DJI rose 648.32 points, or 1.24%, to 52,858.40, the S&P 500 .SPX gained 26.61 points, or 0.36%, to 7,439.79 and the Nasdaq Composite .IXIC lost 3.47 points, or 0.01%, to 24,928.61. Eight of the sectors on the S&P 500 were higher, with consumer staples .SPLRCS, materials .SPLRCM and healthcare .SPXHC up over 2% each. Dow component Coca-Cola KO.N gained 5.5%, as the beverage company raised its annual revenue and profit forecasts. Boeing BA.N gained 4.6% after the airplane maker generated positive free cash flow as its turnaround plans gained momentum. The Federal Reserve is due to announce its interest-rate decision on Wednesday. Traders see a 28% chance of a rate hike this week, according to LSEG data, and expect borrowing costs to rise by at least 25 basis points by year-end. Higher rates could further pressure AI companies that are becoming more dependent on debt financing. Corning GLW.N tanked 15% after third-quarter sales forecasts missed estimates, while contract research firm IQVIA Holdings IQV.N added 13% after lifting its annual profit forecast. Oil prices also offered some broader relief, falling 5.5% to $83.5 a barrel on hopes that tensions in the Middle East and in Ukraine would ease as the White House hosted Israel's Benjamin Netanyahu and Kyiv's Volodymyr Zelenskiy. Advancing issues outnumbered decliners by a 1.56-to-1 ratio on the NYSE. Declining issues outnumbered advancers by a 1.06-to-1 ratio on the Nasdaq. The S&P 500 posted 62 new 52-week highs and one new low, while the Nasdaq Composite recorded 149 new highs and 166 new lows.

S&P 500 inches higher in choppy trading as investors await pivotal earnings

S&P 500 edges higher as chip stocks slide

Investors watch Big Tech earnings and the Fed

Earnings from Coca-Cola, Boeing and others lift individual stocks

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