Nasdaq Slips 0.22% to 25,781.58 as Oil Surges Past $94 and Big Tech Earnings Loom; Dow Defies Weakness with 0.40% Gain

Mumbai, July 22: US stock markets opened on a mixed note on Wednesday, with the technology-heavy Nasdaq Composite (^IXIC) declining 55.62 points, or 0.22%, to 25,781.58, as escalating geopolitical tensions in the Middle East drove crude oil prices sharply higher and reignited inflation concerns ahead of a crucial slate of Big Tech earnings. The S&P 500 (^GSPC) edged down 2.83 points, or 0.04%, to 7,512.03, while the Dow Jones Industrial Average (^DJI) defied the broader weakness, climbing 206.56 points, or 0.40%, to 52,431.20, supported by gains in energy and industrial stocks. 

The mixed opening followed a strong rally on Tuesday, when all three major indices snapped a three-session losing streak. The Nasdaq had surged 1.29% to close at 25,837.21, the S&P 500 advanced 0.89% to 7,509.20, and the Dow gained 0.74% to 52,224.64, driven by a powerful rebound in semiconductor stocks. However, Wednesday’s session saw investors turn cautious as oil prices surged to a six-week high and Treasury yields touched their highest levels since May. 

Brent Crude Tops $94 as US-Iran Conflict Enters 11th Day of Strikes 

Oil prices surged on Wednesday after the United States launched its 11th consecutive night of airstrikes against Iran, expanding its bombing campaign to include the northwest city of Tabriz for the first time since the conflict re-escalated. Brent crude climbed more than 3% to trade above $94 per barrel, briefly crossing the $95 mark, while US West Texas Intermediate (WTI) crude rose around 3% to above $86 per barrel. 

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The escalation has intensified concerns over potential disruptions to the Strait of Hormuz, through which nearly one-fifth of global oil trade passes, keeping energy markets on edge. The spike in crude prices has also revived inflation concerns, with higher energy costs potentially slowing the recent easing in price pressures and complicating the Federal Reserve’s policy outlook. 

Alphabet and Tesla Earnings Take Centre Stage as AI Trade Faces ‘Show Me’ Moment 

Investor focus on Wednesday is squarely on the first wave of “Magnificent Seven” earnings, with Alphabet (GOOGL) and Tesla (TSLA) scheduled to report second-quarter results after the closing bell. The outcomes are expected to provide crucial evidence on whether the technology industry’s massive investments in artificial intelligence are beginning to generate meaningful returns. 

Alphabet, which announced last quarter that it plans to more than double its capital expenditure from 2025 to as much as $190 billion this year, faces particular scrutiny after a delay in the launch of a model central to its AI ambitions intensified concerns. Wall Street expects the Google parent to report earnings of $2.88 per share on revenue of $109.9 billion. Shares of Alphabet edged up less than 1% in premarket trading, remaining sharply below their 50-day moving average. 

Tesla, meanwhile, is expected to post second-quarter revenue of $26.2 billion, representing 16% year-over-year growth, according to FactSet estimates. Analysts forecast $18.9 billion from automotive sales, $3.5 billion from the company’s energy storage business, and $3.8 billion from services and miscellaneous items, including full self-driving subscriptions and Supercharger fees. Earnings per share are expected at 53 cents, up 32.5% from a year earlier. Tesla shares ticked lower in premarket trading after leading the Magnificent Seven gainers with a 2.5% advance on Tuesday. 

Super Micro Computer Surges 17% on Record $60 Billion Order Backlog 

Super Micro Computer (SMCI) emerged as the biggest winner in premarket trading, soaring approximately 17% after the AI server maker released a blockbuster preliminary fourth-quarter update. The San Jose, California-based company, which specializes in high-performance server and storage solutions for AI and cloud computing, reported that it had secured more than $60 billion in new orders during the fiscal fourth quarter. 

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While Super Micro projected quarterly revenue near the lower end of its previously guided range of $11.0 billion to $12.5 billion, investors focused on the company’s expected GAAP and non-GAAP gross margins of 15% to 17%—roughly double its prior guidance of 8.2% to 8.4%. The significant improvement in profitability, attributed to a favourable customer and product mix, reset expectations around the company’s earnings power. Super Micro’s backlog rose to record levels at the end of fiscal 2026, and the company is slated to release its full earnings report on 11 August. 

The news provided a lift to rival server makers, with Dell Technologies (DELL) gaining over 4% and Hewlett Packard Enterprise (HPE) rising more than 2% in premarket trading. 

GE Vernova Slips 5.3% Despite Revenue Beat as Tariffs Weigh on Profit 

GE Vernova (GEV) shares slipped 5.3% in premarket trading after the power equipment and electrification giant reported second-quarter results that missed earnings expectations despite beating on revenue. The company, which provides natural gas turbines and electrification equipment in high demand for AI data centre power solutions, reported earnings per share of $2.47, missing analyst estimates of $3.10. Revenue came in at $11.1 billion, exceeding expectations of $10.8 billion. 

GE Vernova raised its full-year 2026 revenue forecast to $45.5 billion to $46.5 billion, up from previous guidance of $44.5 billion to $45.5 billion, driven by growth in its power division and a deepening order backlog. The company’s power segment saw orders grow 134% to $16.7 billion, led by gas power equipment, while its electrification unit recorded 66% order growth to $6.3 billion. Data centre orders through the electrification division have crossed $5 billion year-to-date, more than doubling its 2025 total. GE Vernova now expects to have at least 125 gigawatts of gas equipment under contract by year-end 2026, up from a prior target of 110 GW. 

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However, the company warned that global tariffs are expected to increase costs by $100 million to $200 million, highlighting the impact of trade policy on cross-border orders. The premium valuation of the stock, which had gained over 65% this year and risen over 85% in the last 12 months, left little room for disappointment. 

AT&T Jumps 4% on Earnings Beat with $0.65 Per Share Profit 

AT&T (T) shares rose more than 4% in premarket trading after the telecommunications giant reported second-quarter earnings that beat Wall Street expectations. The company reported adjusted earnings of $0.65 per share, exceeding analyst estimates of $0.59. Revenue rose 2.3% year-over-year to $31.6 billion, though this came in slightly below the $31.8 billion consensus estimate. 

The earnings beat was driven by stronger-than-expected subscriber growth, improved free cash flow, and disciplined cost management. The positive results provided a lift to the telecommunications sector, with Verizon (VZ) also gaining in early trading. 

Chip Stocks Reverse Tuesday’s Gains as Semiconductor Volatility Persists 

Semiconductor stocks reversed course on Wednesday after a powerful rally on Tuesday, reflecting the continued volatility in the sector that has been central to the AI-driven market rally. The iShares Semiconductor ETF (SOXX), which had surged 5.5% on Tuesday, declined approximately 2% in premarket trading. 

Tuesday’s rally had been led by SanDisk (SNDK) with a 14.3% gain, Western Digital (WDC) with 12.5%, and Micron Technology (MU) with 12.2%. Other semiconductor winners on Tuesday included Teradyne (TER) up 12.1%, Coherent (COHR) up 11.1%, Seagate Technology (STX) up 11.1%, and Intel (INTC) up 8.6%. The Philadelphia SE Semiconductor Index finished with a 5.2% rally in its second consecutive advance after ending Friday more than 20% below its late-June record high. 

However, Wednesday’s premarket trading saw these names give back some gains as the sector’s struggles reflect broader concerns about stretched valuations and demand sustainability. The chip index dipped last week as investors grew concerned about high valuations and hefty investments on artificial intelligence. But even after that drop, it is still up nearly 75% year-to-date. 

Rocket Lab Wins $266 Million US Air Force Contract 

Rocket Lab (RKLB) shares jumped approximately 4% in premarket trading after the company announced it had won a $266 million contract from the US Air Force. The contract includes the launch of 12 suborbital vehicles and is expected to be completed by the end of 2028. The news added to positive sentiment in the aerospace and defence sector, which has benefited from increased defence spending amid rising geopolitical tensions. 

Cal-Maine Foods Plunges 6% on Wider-Than-Expected Loss 

Cal-Maine Foods (CALM) , the largest producer and distributor of fresh shell eggs in the United States, saw its shares slide more than 6% in premarket trading after reporting fiscal first-quarter results that disappointed investors. The company reported a loss of $0.76 per share, significantly wider than analyst expectations of a $0.08 profit. Revenue of $552.6 million also missed consensus estimates of $563.8 million, highlighting the sharp deterioration in shell egg market conditions. 

TECfusions Announces $4 Billion SPAC Merger for AI Data Centres 

In corporate action news, TECfusions, Inc. , an AI-focused data centre developer, announced a definitive business combination agreement with Apex Treasury Corp. in a transaction valued at $4 billion. The company operates facilities optimised for AMD’s Instinct GPU architecture, positioning it as a specialised alternative to the Nvidia-dominated data centre landscape. TECfusions currently operates data centres in three US markets with a total of 37 megawatts live and fully leased in Clarksville, Virginia, 16 MW in Tucson, Arizona, and 2 MW in New Kensington, Pennsylvania. The transaction has been approved by the boards of both companies and is expected to close in the fourth quarter of 2026, subject to Apex Treasury shareholder approval and other customary conditions. Concurrent with the agreement, an institutional investor committed $35 million in a PIPE investment at $10.00 per share. 

Additionally, Southern Cross Acquisition I Corp. priced its $100 million initial public offering, with the offering expected to close on Wednesday. The SPAC deal count for 2026 year-to-date now stands at 130. B&R Technology Merger Corp. also priced a $325 million SPAC IPO. 

Repligen to Acquire BioLife Solutions in $1.5 Billion Cash-and-Stock Deal 

Repligen Corp. (RGEN) , a life sciences company, agreed on Wednesday to acquire BioLife Solutions Inc. (BLFS) in a cash-and-stock deal valued at approximately $1.5 billion, expanding its presence in the fast-growing cell therapy market. The deal is valued at $31 per share, representing a 24% premium to BioLife’s 90-day volume-weighted average price through 21 July. Under the agreement, BioLife shareholders will receive $11.25 in cash and 0.1442 of Repligen’s shares for each BioLife share. 

The acquisition is expected to close in the fourth quarter of 2026 and is expected to be accretive to Repligen’s revenue growth, adjusted margins, and adjusted earnings per share, contributing at least $0.05 per share in the first year and $0.25 per share in the second year. The company also expects to realize at least $20 million in synergies in year one and $30 million in year two. In pre-market trading, Repligen Corp was 0.85% lower at $135.82, while BioLife Solutions was 1.23% higher at $29.55 on the Nasdaq. 

Monday.com Announces 20% Workforce Reduction in Restructuring Plan 

Monday.com (MNDY) , the Israel-based software company known for its work management platform, announced a restructuring plan that includes laying off approximately 20% of its workforce. The company said the restructuring is “intended to support a leaner, more focused operating model” as it “continues to invest in its AI-driven growth strategy”. Monday.com estimates it will incur approximately $45 million to $55 million in net charges, which are expected to be recognised in the second half of the year. The company now sees full-year adjusted operating margin of about 15% , up from previous guidance of roughly 13% . Shares rose 2% in premarket trading following the announcement. 

Jersey Mike’s and Reformation IPOs Advance as Retail Listings Test Market 

Sandwich chain Jersey Mike’s and women’s fashion retailer Reformation are advancing their planned IPOs, putting the spotlight on US retail listings. Blackstone-owned Jersey Mike’s plans to raise up to $1.09 billion by pricing shares between $21 and $25 apiece for a valuation of nearly $8 billion, while Permira-backed Reformation plans to raise up to $239 million by pricing shares between $15 and $17 apiece for a valuation of up to $1 billion. The two companies are seeking to raise more than what the five retail IPOs combined have raised in 2026. A strong market debut by Jersey Mike’s and Reformation could encourage other retail companies waiting in the IPO pipeline to move ahead with listings, including gas station chain Cumberland Farms and Men’s Wearhouse owner Tailored Brands. 

ServiceNow, IBM and Texas Instruments Set to Report After Close 

Beyond Alphabet and Tesla, several other major companies are scheduled to report quarterly results after Wednesday’s closing bell. ServiceNow (NOW) , International Business Machines (IBM) , and Texas Instruments (TXN) are all on the earnings calendar. IBM’s report comes after a pre-earnings warning last week that sent shares plunging, with investors seeking clarity on the company’s turnaround strategy and AI initiatives. Texas Instruments, which slipped 1.7% in premarket trading, is expected to provide insights into semiconductor demand trends across industrial and automotive end-markets. 

10-Year Treasury Yield Hits 4.64%, Highest Intraday Level Since May 

US Treasury yields rose to multi-month highs on Wednesday as surging oil prices fueled inflation concerns. The yield on the 10-year Treasury note, a key benchmark for mortgages and consumer loans, climbed to 4.64%, its highest intraday level since 21 May. The 30-year Treasury yield rose to 5.14%, while the 2-year yield, which more closely tracks Federal Reserve policy expectations, edged up to 4.25%. 

According to the CME Group’s FedWatch tool, traders are now pricing in a 24% likelihood of a Federal Reserve rate hike at next week’s policy meeting, up from less than 11% one week ago. The probability of at least a quarter-percentage-point rate hike at the September meeting has surged to 69%, up from 48% a week earlier. The shift in rate expectations reflects growing concerns that elevated oil prices could reverse the recent moderation in inflation. 

The mixed market opening reflects competing forces of AI optimism, geopolitical uncertainty, and rising oil prices. With Brent crude above $94 and the 10-year Treasury yield at 4.64%, inflation concerns have resurfaced ahead of the Federal Reserve’s pre-meeting quiet period. Tonight’s earnings from Alphabet and Tesla will be key to gauging whether the AI-driven rally can continue or if valuation pressures may trigger a broader market correction. 

Source 

• https://www.nasdaq.com/ 

• spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.dowjones.com/