US stocks took a breather on Wednesday after a powerful rally, with investors balancing strong compant results against renewed concerns over artificial intelligence spending and US-Iran negotiations.
The S&P 500 fell almost 0.2% after reaching a record close on Tuesday, while the Nasdaq Composite dropped 0.8% to end a four-day winning streak. The Dow Jones Industrial Average moved in the opposite direction, gaining 0.5% to reach another all-time high.
Technology shares were mixed as investors moved between winners and recent market favourites. Nvidia was one of the stronger performers, climbing more than 3%, but other chip-related names struggled after their latest updates failed to match already high expectations.
SpaceX Shares Drop Despite Strong First Results
SpaceX shares fell 13% after the company’s first earnings report failed to receive the reaction investors had hoped for. The company beat expectations in the second quarter, but attention quickly turned towards its heavy artificial intelligence spending and the upcoming release of additional shares for trading.
Around 20% of SpaceX shares are due to become available this week following the end of the lock-up period, adding another factor for investors to consider after the stock’s recent decline.
AMD also reported better-than-expected results and raised its outlook, but shares moved lower as investors looked for what analysts described as exceptional results rather than simply strong numbers. Memory chip names SanDisk and Western Digital also fell after their earnings reports, following big gains earlier in the year.
Oil Prices Fall as Markets Watch Iran Developments
Markets also followed comments from President Donald Trump suggesting a deal to reopen the Strait of Hormuz could happen as early as Wednesday. The possibility of progress between the US and Iran helped push oil prices lower, although investors remained cautious over whether a lasting agreement could be reached.
The move supported some rotation into other parts of the market, with investors continuing to assess the latest earnings reports and economic developments.
FTSE 100 Edges Higher as Next Leads Retail Gains
In London, the FTSE 100 ended slightly higher as strong results from Next and gains among mining companies helped offset weakness in Asia-focused banks and insurers.
The main index rose 0.1%, while the FTSE 250 gained 0.7% as investors reacted to earning releases and signs of improving conditions across parts of the UK economy.
Next shares jumped 5.7% after the retailer raised its profit guidance for the 20th time since the start of its 2024 financial year. Full-price sales increased 9.2% in the 13 weeks to 1 August, ahead of previous expectations, while international online sales surged 37%.
Mining stocks also supported the FTSE 100, with Endeavour Mining rising 5.7%, Fresnillo gaining 4.5% and Glencore climbing 4.1% after announcing a special dividend, a new share buyback programme and plans for a possible Australian listing.
Asia-focused financial stocks fell after reports that Chinese authorities had started applying personal income tax rules to returns from offshore insurance policies. Prudential dropped 6.4%, HSBC declined 4.7% and Standard Chartered lost 1.6%.
On the FTSE 250, 4Imprint gained 11% after saying full-year revenue and earnings are expected to exceed current market expectations, while B90 Holdings rose 3.5% following strong first-half trading.
