Key facts
- Wall Street indexes were poised for a higher open, driven by Middle East peace hopes.
- SpaceX shares fell significantly in premarket trading despite a revenue increase and narrowed operating losses.
- Advanced Micro Devices forecast strong quarterly revenue driven by AI demand, but its stock declined.
- The S&P 500 and Dow Jones Industrial Average reached record highs.
- Eli Lilly and Disney reported positive earnings results, leading to stock gains.
- US private payrolls growth slowed in July, as indicated by the ADP report.
Wall Street's main indexes were set to open higher on Wednesday, as hopes for a Middle East peace breakthrough offset declines in shares of SpaceX and AMD. Despite upbeat forecasts, both companies' shares slid in premarket trading.
SpaceX's revenue nearly doubled and operating losses narrowed in its first earnings report, fueled by its Starlink satellite communications and AI businesses. However, the company's shares slid 12.5% in early trading as executives flagged ongoing high spending. Shares could face additional pressure from the expiry of the stock's post-IPO lock-up period starting on Thursday. Elon Musk's other company, Tesla, slipped 1.6%.
Advanced Micro Devices forecast quarterly revenue above estimates, reflecting strong AI demand. However, its shares slipped 6.5%, suggesting investors were looking for a stronger outlook to justify the stock's significant jump this year. Rival Nvidia's shares rose 3.4%, partly underpinned by SpaceX's plans to use its hardware for data centers.
Most megacap stocks gained, with Microsoft and Alphabet up about 1% each. Seven of the 11 S&P sectors were trading higher, with healthcare leading gains with a 1.9% rise, while utilities lagged with a near 1% fall.
The benchmark S&P 500 and the blue-chip Dow Jones Industrial Average reached record highs. At 9:34 a.m. ET, the Dow Jones Industrial Average rose 450.80 points, or 0.83%, to 54,536.68, and the S&P 500 gained 46.98 points, or 0.61%, to 7,783.50. The Nasdaq Composite gained 109.43 points, or 0.41%, to 26,694.42.
Other notable earnings included drugmaker Eli Lilly, which was up 7.3% after raising its full-year revenue forecast, and Disney, which rose 2.9% after beating third-quarter profit expectations. Arista Networks jumped 7.3% after forecasting third-quarter revenue above estimates, while Uber lost 5.5% after forecasting current-quarter adjusted earnings below estimates.
On the data front, U.S. private payrolls growth slowed in July, according to the ADP national employment report. Minneapolis Fed President Neel Kashkari indicated a belief that now is the time to start slowly moving interest rates higher. Advancing issues outnumbered decliners on both the NYSE and Nasdaq.