U.S. stocks closed lower on Wednesday, with the Nasdaq Composite dropping 146.30 points, or 0.57%, to end at 25,690.90, leading the market down amid weakness in technology shares. The Dow Jones Industrial Average slipped 6.06 points, or 0.01%, to 52,218.58, and the S&P 500 fell 10.24 points, or 0.14%, to 7,498.96. Alphabet shares closed down 1.5% after a delay in launching a key AI model, while Tesla ended the regular session 1.3% lower before falling a further 3% in after-hours trading following a report of negative free cash flow in the second quarter for the first time in more than two years. Crude oil futures surged about 3% to close at their highest level since June 11, 2026, amid Middle East tensions as Yemen's Houthi group threatened Red Sea shipping and President Donald Trump announced the U.S. would destroy Iran's infrastructure every time Iran attacks vessels in the strait. Investors are also watching earnings from Alphabet and Tesla, the first of the Magnificent Seven members to report this cycle, to assess whether billions of dollars in AI investment are starting to pay off. Meanwhile, a Reuters poll of economists indicated the Federal Reserve is likely to hold interest rates steady for the rest of 2026, and data from CME Group's FedWatch tool showed investors see about a 66% chance the Fed will keep rates unchanged at next week's meeting.
Alphabet Inc Class CAlphabet shares fell 1.5% after a delay in launching a key AI model.
Tesla IncTesla reported negative free cash flow in Q2 for the first time in over two years, causing after-hours drop.