WASHINGTON (dpa-AFX) - Following the strength seen in the previous session, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing in negative territory.
The Nasdaq slid 146.30 points or 0.6 percent to 25,690.90 and the S&P 500 edged down 10.24 points or 0.1 percent to 7,498.96. The narrower Dow spent most of the day in positive territory but closed down 6.06 points or less than a tenth of a percent at 52,218.58.
The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of some key earnings news.
Tech giants Alphabet (GOOGL), Tesla (TSLA) and IBM Corp. (IBM) are among the companies releasing their quarterly results after the close of today's trading.
The companies' results and guidance could have a significant impact on the outlook for the AI trade, which has recently been a key driver of the markets.
'The key question is whether earnings can justify both elevated valuations and the scale of AI-related investment,' said Daniela Hathorn, Senior Market Analyst at Capital.com. 'Investors will be focused not only on headline revenue and profit, but also on cloud growth, AI monetisation, margins and capital-expenditure guidance.'
She added, 'Strong results could allow technology shares to remain resilient despite higher oil, while weaker guidance could expose the market's dependence on a relatively narrow group of companies.'
Meanwhile, traders attempted to shrug off an extended by the price of crude oil, with U.S. crude oil futures spiking by nearly 3 percent to their highest levels in over a month amid concerns about the escalating conflict between the U.S. and Iran.
U.S. Central Command said it successfully completed the 11th consecutive evening of strikes against Iran on Tuesday.
Centcom said U.S. forces targeted Iranian military operations centers, maritime capabilities, aircraft hangars, drone storage facilities, and military logistics infrastructure to further degrade Iran's ability to threaten commercial shipping in the Strait of Hormuz.
The continued strikes come as Secretary of State Marco Rubio said the U.S. remains open to a diplomatic settlement of the conflict but argued Iran is 'not serious about talks.'
'If they're serious, we're serious. If they're not, then we will do what is necessary to protect our interests and also the interests of our allies,' Rubio said.
In a post on Truth Social, President Donald Trump also threatened to bomb and destroy one Iranian bridge or power plant any time the Iran shoots at a ship in the Strait of Hormuz.
Sector News
Software stocks showed a significant move to the downside on the day, resulting in a 2.5 percent slump by the Dow Jones U.S. Software Index.
Considerable weakness was also visible among airline stocks due to the surge in crude oil prices, with the NYSE Arca Airline Index falling by 1.8 percent.
On the other hand, gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.3 percent.
Computer hardware, utilities and natural gas stocks also saw significant strength, helping limit the downside for the broader markets.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Japan's Nikkei 225 Index dipped by 0.2 percent, while China's Shanghai Composite Index inched up by 0.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.2 percent, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index climbed by 0.6 percent.
In the bond market, treasuries extended the downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.9 basis points to a two-month closing high of 4.657 percent.
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