Opening Bell: Dow, S&P, and Nasdaq Edge Higher as Tech and Energy Diverge

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U.S. stocks opened modestly higher Wednesday morning, buoyed by continued strength in Big Tech and recovering energy prices, even as macroeconomic uncertainty and disappointing results from key sectors kept enthusiasm in check.

The Dow Jones Industrial Average rose 55 points, or 0.13%, shortly after the bell, while the S&P 500 added 10.81 points (0.17%), led by gains in the tech and energy sectors. The Nasdaq Composite advanced 53.62 points, or 0.26%, as investors continued to favor AI-related names amid growing adoption and earnings momentum.

Tech Keeps Leading as AI Demand Outpaces Headwinds

Investor optimism remains centered on the artificial intelligence boom, with companies like Microsoft and Meta continuing to draw institutional flows. According to Wedbush, this enthusiasm is justified: "We have barely scratched the surface of this 4th Industrial Revolution... led by the Big Tech stalwarts such as Nvidia, Microsoft, Palantir, Meta, Alphabet, and Amazon."

Chipmaker Advanced Micro Devices (AMD). Shares fell at the opening bell down more than 5% even though the company posted stronger-than-expected Q2 results, driven by robust demand for server CPUs and client compute units. The outlook for Q3 includes data center GPU sales rising over 70% quarter-over-quarter, though not yet reflecting potential China sales due to license uncertainties. Wedbush raised its price target on AMD to $190 from $170, citing likely China upside and strength across compute segments.

On the infrastructure side, Arista Networks reported blockbuster earnings, fueled by AI networking demand from hyperscalers like Meta and Microsoft. Analysts now expect Arista to exceed $10 billion in annual revenue by 2026, two years ahead of prior expectations, with deferred product revenue up $687 million sequentially. Shares surged 13% post-earnings.

Energy Markets Rebound as Crude Rallies

Crude oil futures for September delivery rose 1.87% to $66.38, reflecting renewed confidence in global demand. That follows a stretch of softness tied to concerns over slowing growth and regulatory changes in key markets. The bounce offered early-session tailwinds to energy-heavy indices like the Dow.

Gold futures for December slipped 0.30% to $3,424.40 per ounce, as rising real yields and improved risk sentiment weighed on the precious metal. The price remains volatile within a narrow range between $3,411.70 and $3,440.50.

RIVN Misses Hard, Cuts EBITDA Guidance

Shares of Rivian Automotive (RIVN) were under pressure after the EV maker slashed its FY2025 adjusted EBITDA forecast to a loss of $2.0–$2.25 billion, sharply wider than previous guidance of negative $1.70–$1.90 billion. The company cited regulatory credit changes and underwhelming Q2 execution. Although revenue rose 12.5% to $1.3 billion, vehicle deliveries fell 23% year-over-year to 10,661 units.

Wedbush analysts described Rivian as a "work in progress," emphasizing ongoing macro headwinds, tariffs, and the upcoming R2 line launch. CFRA’s Garrett Nelson noted that the guidance cut "raises questions" about Rivian’s execution and cash burn heading into a pivotal product cycle.

Broader Market Picture: Mixed Sentiment

Despite pockets of strength, investor caution remains prevalent. The Russell 2000, a proxy for small caps and domestic cyclicals, fell 0.18% in early trade, highlighting ongoing concerns around margins and rate-sensitive sectors. Market breadth was evenly split, with 54% of stocks showing bearish signals versus 46% bullish, according to Finviz data.

Sector rotation continues to favor tech, particularly companies with strong AI exposure and earnings momentum. Meanwhile, cyclicals and rate-sensitive stocks face pressure amid persistent macro uncertainty, including tariffs, slower deal cycles, and uneven consumer demand.

Outlook

With Q2 earnings season peaking and major tech names delivering outsized beats, investors are looking toward macro catalysts, including potential tariff announcements and upcoming inflation data, for further direction. Key resistance levels in major indices loom large — especially the Nasdaq near 21,000 — but AI-driven optimism and selective strength in software and semiconductors may provide continued support.

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