Wall Street records hold as SpaceX and AMD shares fall

Wall Street’s record-setting advance continued on Wednesday, but gains were uneven as sharp declines in SpaceX and Advanced Micro Devices shares held back the technology-heavy Nasdaq. The Dow Jones Industrial Average and S&P 500 both reached all-time highs amid hopes for a breakthrough in Middle East peace efforts.

At 11:38 a.m. ET, the Dow was up 435.6 points, or 0.81%, at 54,521.48. The S&P 500 had added 8.34 points, or 0.11%, to 7,744.86, while the Nasdaq Composite was down 10.68 points, or 0.04%, at 26,574.32.

The mixed session came after a strong run for US equities. The S&P 500 and Dow had recently climbed to records following optimistic projections from major artificial intelligence companies, including Microsoft and Amazon. Investors were now assessing whether the spending required to support the AI boom would produce enough growth to justify elevated valuations.

SpaceX results fail to satisfy investors

SpaceX shares fell 7.3% even though the company reported nearly a doubling of revenue and a reduction in operating losses in its first results since becoming publicly traded. Growth was supported by demand for Starlink satellite communications and by the company’s expanding artificial intelligence operations.

Investors instead focused on the scale of future expenditure. Company executives indicated that the spending programme behind SpaceX’s longer-term ambitions would continue, prompting concerns that the company’s investment needs could remain high. The stock may also come under further pressure as restrictions on early investors’ ability to sell shares begin to expire on Thursday.

The decline extended beyond SpaceX. Tesla, another company led by Elon Musk, lost 1.3% during the session. SpaceX’s plans to rely exclusively on Nvidia hardware for its data centres helped Nvidia shares rise 3.7%. Nvidia has underperformed AMD this year, despite its gain on Wednesday.

AMD dropped 6.5% after forecasting quarterly revenue above analysts’ estimates. The outlook reflected continued demand for AI-related products, but the reaction suggested that investors had expected a stronger projection after the chipmaker’s shares had risen 142% this year.

Sector moves and company results

Only five of the S&P 500’s 11 sectors were higher. Materials stocks led the advancing groups, gaining 1.5% as gold and silver prices climbed 4%. Energy shares were the weakest major group, falling almost 2.1% as investors continued to assess the effects of Middle East tensions and elevated energy costs.

Several companies outside the technology sector also moved sharply after reporting results or forecasts. Eli rose 2.8% after increasing its revenue projection for the full year. Disney gained 2.2% after reporting third-quarter profit that exceeded expectations.

Arista Networks advanced 3.8% after its estimate for third-quarter revenue came in above forecasts. Uber moved in the opposite direction, falling 6.2% after projecting adjusted earnings for the current quarter below analysts’ expectations.

In the healthcare sector, Charles River Laboratories jumped 11.8% after raising its annual profit outlook. Insulet plunged 20% after cutting its forecast for annual sales growth.

Despite the index records, the wider market showed more declining than rising shares. On the New York Stock Exchange, declining issues outnumbered advancers by 1.2 to one. The ratio on the Nasdaq was 1.37 to one. The S&P 500 recorded 33 new 52-week highs and two new lows, while the Nasdaq registered 86 new highs and 50 new lows.

Employment data and interest-rate uncertainty

Economic indicators added another layer of uncertainty. The ADP national employment report showed that growth in private payrolls slowed in July. Investors were looking ahead to the official non-farm payrolls report due on Friday, which is expected to provide a broader view of labour-market conditions.

Recent data has generally pointed to a resilient US economy. However, the combination of Middle East tensions, higher energy costs and the Federal Reserve’s lack of forward guidance on monetary policy has left investors uncertain about the market’s next direction.

Minneapolis Federal Reserve President Neel Kashkari said in a CNBC interview that he believed the time had come to begin raising interest rates gradually. At least two other senior Federal Reserve officials were also expected to speak later on Wednesday.

The Edge Malaysia reported that the market’s record levels therefore masked a more cautious trading environment. Investors were willing to support broad US benchmarks on hopes of progress in the Middle East and continued economic strength, but the reaction to SpaceX and AMD showed that strong growth figures alone were no longer enough to guarantee gains for high-profile technology companies.