U.S. stocks were trading mixed late Wednesday as traders monitored rising oil prices and braced for more corporate results.
The Dow Jones Industrial Average was up 47.63 points, or 0.09%, at 52,272.27. The Nasdaq Composite fell 92.55 points, or 0.36%, to 25,744.65, while the S&P 500 dipped 1.88 points, or 0.03%, to 7,507.32.
At the time of writing, Brent crude futures were up 2%, trading above $93 a barrel and reaching their highest level in over a month, having briefly surpassed $95. West Texas Intermediate crude futures also rose 2%, breaking above $86 per barrel.
The increase in oil prices followed the United States' eleventh consecutive round of strikes on Iran. U.S. Secretary of State Marco Rubio stated that Iran "is not serious about negotiations."
"If they are serious, we are serious. If they are not serious, then we will take the measures necessary to protect our interests and the interests of our allies," he said.
Rubio added that U.S. forces would "continue to protect" shipping through the Strait of Hormuz.
Traders are closely watching oil prices, concerned that they could keep consumer goods prices elevated—a scenario that might prompt the Federal Reserve to raise interest rates.
"Inflation is indeed high, and I don't think the Fed can do much about it," said Thomas Martin, senior portfolio manager at Globalt Investments. "One factor certainly affecting the market right now is where interest rates are going from here."
As of Wednesday afternoon, traders in the federal funds futures market were pricing in a 31% chance of a Fed rate hike this month, up from 10% a week ago. According to the CME FedWatch Tool, traders also assigned a 75% probability of at least a 25-basis-point hike by September.
Corporate earnings returned to the spotlight on Wednesday, with reports due from ServiceNow, International Business Machines, Tesla, Texas Instruments, and Alphabet. Investors will be keenly focused on updates regarding AI spending, cloud demand, corporate technology budgets, and the outlook for the second half of the year.
As the earnings season progresses, investors remain focused on whether strong demand for AI infrastructure and software can continue to support the overall high valuations in the technology sector.
"It really all comes down to the order book," Martin said. "Beating earnings is important; raising guidance is important, but what drives all of this isn't necessarily next quarter's or this year's profits, but expectations for how long this cycle can last and how much growth we can expect a year, two years, three years out."
"Everyone will be watching those hyperscalers," he added.
Shares of Super Micro Computer surged 21% after the server maker forecast better-than-expected margins for its fourth fiscal quarter and reported new orders exceeding $60 billion for the period.
AT&T shares also moved higher, gaining 2% after the telecommunications company posted better-than-expected second-quarter results. Conversely, shares of GE Vernova fell 8% after its second-quarter earnings fell short of expectations.
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