Wall Street opened lower on Wednesday as investors prepared for earnings announcements by major technology companies and the escalated situation in the Middle East pushed up the price of crude oil. The weakness of US giants weighed on the market, even though the majority of shares in the S&P 500 index were rising, according to the news agency Bloomberg.
The broad S&P 500 index fell 0.2 percent and the technology-focused Nasdaq 100 retreated 0.5 percent. The Dow Jones, on the other hand, strengthened slightly by 0.1 percent.
The market was nervous about the strong rise in oil prices after the US expanded its airstrikes on Iran, which weakened hopes for a diplomatic solution and the opening of the Strait of Hormuz.
North Sea Brent crude oil traded above $95 a barrel, and US WTI oil rose 2.6 percent to $86.56. Rising oil prices fueled inflationary concerns among investors, pushing up bond yields. The interest rate on the US 10-year government bond rose to 4.65 percent, and the 30-year interest rate has already remained at more than five percent for longer.
“Energy market rally continues to weigh on sovereign bond markets as U.S.-Iran hostilities intensify,” BMO Capital Markets Ian Lyngen reviews Bloomberg.
Investors’ interest is focused on those that announce their results Alphabetine, Tesla’s and to IBM. Companies that have invested huge sums in artificial intelligence are now required to provide concrete evidence of the return on capital. The performance of technology giants has been exceptionally sticky this year, as the Magnificent Seven index consisting of giant companies has lagged behind the general S&P 500 performance.
The sector also received news about cooperation and demand. Chip manufacturer AMD agreed to invest up to five billion dollars in Anthropic’s hardware development.
A drastic change in strategy from Nike in China
On the corporate front, the sportswear giant Nike announced that it was ending online sales contracts with hundreds of its Chinese distributors to revive its sagging sales in the region. Managing director Elliott Hill the reform implemented by the management aims to improve brand management and a clearer consumer experience in China, where the company’s turnover has been declining for two years already.
Operating company AT&T reported better-than-expected growth in monthly customers in the second quarter, which eased investors worried about stiff competition.
A tobacco company Philip Morris on the other hand, reported strong demand for its smoke-free products, even though the company had to cut its profit forecast due to unfavorable exchange rates.