Dow flat as S&P 500, Nasdaq slip before Big Tech earnings, oil climbs

• Oil prices hit their highest levels since June 11, with Brent above $94 and WTI above $86, driven by 11 consecutive US strikes against Iran and Red Sea shipping threats, raising inflation and Fed rate hike concerns.
• Market expectations for a Fed rate hike this month jumped to 31% from 10% a week earlier, with traders pricing in a 75% chance of at least a quarter-point increase in September.
• Super Micro Computer surged 21% after reporting over $60 billion in new AI server orders and stronger-than-expected margins, while GE Vernova fell 8% on an earnings miss.

Market Summary: Big Tech Earnings and Oil Surge Drive Mixed Trading

Market Performance:

US stocks closed mixed on Wednesday, with the S&P 500 declining 0.1% and Nasdaq falling 0.6%, while the Dow Jones Industrial Average remained essentially flat, down just 5 points.

Key Drivers:

*Earnings Season:* Investors focused on upcoming Big Tech earnings, particularly from Alphabet and Tesla—the first "Magnificent Seven" companies reporting second-quarter results. Markets are scrutinizing whether massive AI investments are delivering sustainable growth and improved financial performance.

*Standout Performance:* Super Micro Computer (SMCI) surged 21% after reporting stronger-than-expected fiscal Q4 margins and securing over $60 billion in new AI server orders. This rally lifted related stocks including Dell, which gained 9%.

Oil and Inflation Concerns:

Energy markets drove significant sentiment shifts as Brent crude climbed approximately 3% to above $94 per barrel, while WTI rose 3% to above $86—both hitting their highest settlements since June 11. The surge follows 11 consecutive rounds of US strikes against Iran and ongoing Red Sea shipping threats.

Rising oil prices have reignited inflation concerns and shifted Federal Reserve rate expectations dramatically. Fed funds futures now imply a 31% probability of a July rate hike (up from 10% a week prior) and a 75% chance of at least a quarter-point increase in September.

Other Corporate Movers:

• Verizon beat wireless subscription estimates
• Philip Morris International exceeded earnings on strong cigarette demand
• GE Vernova fell 8% on an earnings miss
• Palantir declined 5%

Market Outlook:

Investors remain cautious as they balance strong corporate AI investment against elevated geopolitical risks, higher energy costs, and renewed monetary policy uncertainty.