Stocks Open Mixed as Tech Rises, Industrials Slide Amid AI Push and Presidential Fed Visit

U.S. stock indexes opened with diverging moves Thursday morning, as traders parsed a flurry of corporate earnings, regulatory headlines, and geopolitical signals. The Dow Jones Industrial Average dropped 307.14 points, or 0.68%, to 44,703.10, pressured by weakness in industrial and legacy tech names. Meanwhile, the Nasdaq Composite rose 54.33 points, or 0.26%, to 21,074.30, lifted by investor enthusiasm over AI-related earnings. The S&P 500 edged up 5.81 points, or 0.09%, to 6,364.72.

📺 Bob Elliott: Markets Are Delusional — And Credit Knows It

The early session split underscores a broader divergence in investor sentiment. Alphabet’s (Google) robust Q2 earnings helped lead the charge in tech, while blue-chip names tied to global industrial and automotive demand dragged.

Alphabet reported $96.4 billion in Q2 revenue, beating Wall Street expectations. The tech giant's Google Cloud segment surged 32% to $13.6 billion in revenue, with operating income doubling to $2.83 billion amid escalating demand for AI services. Management raised full-year capital expenditure guidance to $85 billion, signaling aggressive investment in AI infrastructure. Ad revenue also exceeded expectations at $71.3 billion. The upbeat results and bullish tone on AI helped reverse a modest premarket dip in Alphabet shares.

Tesla, by contrast, reported mixed results. While Q2 revenue of $22.5 billion narrowly topped estimates, automotive sales plunged 16% year-over-year and margins dropped to 4.1%, raising red flags. CEO Elon Musk touted ambitious plans for robotaxi expansion and Optimus humanoid robots, targeting coverage of half the U.S. population by year-end. However, rising tariff costs, expiring EV tax credits, and vague regulatory prospects in China and Europe left investors cautious. Tesla’s $146 million free cash flow and $37 billion in reserves provided a buffer, but fundamentals remain under pressure.

IBM also beat top-line expectations, driven by infrastructure demand and AI momentum—IBM Z revenue jumped 70%, and generative AI bookings surpassed $7.5 billion. However, software revenue and margins came in light, triggering a 5.5% decline in the stock. Despite raising full-year free cash flow guidance to over $13.5 billion, investors questioned IBM’s ability to reinvigorate its core software business, which remains pivotal to its transformation narrative.

Outside earnings, geopolitical developments loomed large. President Donald Trump is scheduled to visit the Federal Reserve at 4:00 p.m. ET today, marking the first official presidential visit to the central bank in nearly two decades. The visit comes amid controversy surrounding the Federal Reserve building’s renovation and speculation over potential tensions with Fed Chair Jerome Powell.

In a separate development, President Trump signed an executive order, on Wednesday, establishing the American AI Exports Program, a sweeping initiative aimed at bolstering the global reach of U.S.-origin AI technologies. The program mandates a full-stack AI export strategy—covering hardware, cloud, software, and cybersecurity—and empowers the Commerce Department to support selected consortia with financial incentives and international engagement tools.

Bond markets also reflected shifting macro sentiment. The 2-Year Treasury yield futures for July 2025 rose to 3.8680%, up 1.90 basis points, while the benchmark 10-Year yield ticked up to 4.4340%, suggesting investor recalibration around long-term growth and inflation expectations. Meanwhile, gold retreated 1.20% to $3,356.70 per ounce, and crude oil advanced 1.16% to $66.01, reflecting fluctuating views on global demand. 📺 Will the Fed finally blink?