US Stocks-S&P 500 is close to flat as investors await technology earnings

The crowded earnings calendar leaves markets vulnerable to sharper swings this week, while geopolitical tensions added another layer of caution. Fighting in the Middle East remained in focus as threats to shipping by Yemen's Iran-backed Houthi militia, alongside a widening conflict, disrupted two of the world's most important energy chokepoints. President Donald Trump vowed on Wednesday to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz. Oil prices climbed to near six-week highs, complicating the outlook for central bankers. "Excluding the megacap AI trade, there's an element of what's going on with oil that's driving the market," said Schwab's Gordon, noting that high oil prices are fanning inflation worries. "People are being defensive with utilities, but with energy and materials being higher, that's the inflation component." The Federal Reserve is expected to keep interest rates steady for the rest of 2026, according to the median forecast in a Reuters poll of economists. Still, respondents said the risk of a rate hike remained elevated. Traders are pricing in a more than 68% chance the Fed leaves rates unchanged at next week's meeting, CME Group's FedWatch tool showed. Among other movers, AT&T T.N rose 2.6% after the telecom firm added more wireless subscribers than expected in the second quarter. Philip Morris International PM.N gained 2.9% after stronger cigarette demand helped the company beat quarterly results estimates. The Philadelphia SE Semiconductor index .SOX was last up 1%, bouncing off early losses. The index was angling for its third straight day of gains after three days of losses that had confirmed it was in a bear market last week. Investors were preparing for second-quarter results from Alphabet GOOGL.O and Tesla TSLA.O, 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. "Investors have become a lot more discerning and specific as to where they're choosing to invest in the AI trade," said Kevin Gordon, head of macro research and strategy at Charles Schwab. Gordon noted that software stocks fell while chip stocks rose during the session. At 2 p.m., the Dow Jones Industrial Average .DJI rose 90.16 points, or 0.17%, to 52,312.64, the S&P 500 .SPX rose 2.61 points, or 0.03%, to 7,511.46 and the Nasdaq Composite .IXIC fell 75.47 points, or 0.29%, to 25,761.74. Alphabet, whose shares were up 0.3%, will be under scrutiny after a delay in the launch of a model central to its AI ambitions. Texas Instruments TXN.O, also due to report after the close, ticked nearly 1% higher. Among the benchmark index's 11 major industry sectors, just six were advancing with utilities .SPLRCU up 2% and leading gains followed by materials .SPLRCM, up 1.4%. Consumer discretionary .SPLRCD, the biggest laggard, was down 1%. The S&P 500 information technology sector .SPLRCT swung between losses and gains during the session but was last up 0.05%, with support from gains in AI-linked chip stocks such as Nvidia NVDA.O, Broadcom AVGO.O and Advanced Micro Devices AMD.O. The S&P 500 software and services index .SPLRCIS was down 2.9%. Super Micro Computer SMCI.O shares were up 21% after the server maker said it had secured more than $60 billion in new orders in the fourth quarter. Peers Dell Technologies DELL.N and Hewlett Packard Enterprise HPE.N climbed about 10% and nearly 5%, respectively, after Super Micro also reported upbeat preliminary results. The broader megacap complex was weaker, with Microsoft MSFT.O, Amazon AMZN.O, Apple AAPL.O and Meta Platforms META.O providing the biggest drags to the S&P 500. The S&P 500 was barely higher on Wednesday, while the Nasdaq dipped as technology stocks were mixed, with investors awaiting earnings reports to gauge the health of the market rally driven by artificial intelligence. After months of gains that lifted the major indexes from their March lows, momentum has been wobbling with uneven trading in heavyweight semiconductor stocks and weakness in software stocks.

US Stocks-S&P 500 is close to flat as investors await technology earnings

Macro backdrop and other movers

Semiconductors and megacaps move unevenly

Index levels, sector moves and individual stocks

Markets little changed ahead of big tech earnings

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