The major averages spent most of the session drifting near unchanged levels amid lower-than-average trading volume, suggesting investors exercised some caution ahead of Alphabet's (GOOG 341.91, -4.28, -1.24%) and Tesla's (TSLA 374.13, -4.80, -1.27%) earnings reports after the close. The S&P 500 (-0.1%), Nasdaq Composite (-0.6%), and DJIA (flat) finished near their opening levels as stocks gave back some early gains throughout the afternoon.

Semiconductor stocks opened lower following yesterday's rally but quickly attracted buy-the-dip interest, allowing the PHLX Semiconductor Index to reverse an early decline and finish 0.4% higher. NVIDIA (NVDA 212.04, +4.75, +2.29%) was the only "Magnificent Seven" stock that finished higher, while Advanced Micro Devices (AMD 552.33, +7.90, +1.45%) gained after announcing a strategic partnership with Anthropic.

The semiconductor rebound helped the information technology sector (flat) shake off an opening loss, though it was held back by pronounced weakness across software stocks. The iShares Expanded Tech-Software Sector ETF (IGV) fell 3.0% after Pegasystems (PEGA 25.99, -4.95, -16.00%) reported disappointing results and said rapid changes in the AI landscape have caused customers to delay purchasing decisions, echoing similar commentary from IBM (IBM 206.09, -4.41, -2.10%) last week. ServiceNow (NOW 95.45, -6.61, -6.48%) was particularly weak ahead of its earnings report after the close.

Elsewhere in the sector, Super Micro Computer (SMCI 30.56, +5.06, +19.84%) surged after issuing encouraging margin guidance and reporting a record backlog, supporting gains across other AI infrastructure names such as Dell (DELL 441.70, +37.55, +9.29%) and Hewlett Packard Enterprise (HPE 48.14, +1.42, +3.04%).

Despite some notably strong pockets of tech, it was a relatively weak day for mega-cap stocks. The Vanguard Mega Cap Growth ETF shed 0.6%, with Meta Platforms (META 627.17, -16.64, -2.58%), Alphabet (GOOG 341.91, -4.28, -1.24%), Tesla (TSLA 374.13, -4.80, -1.27%), and Amazon (AMZN 244.85, -2.70, -1.09%) all finishing lower. The consumer discretionary sector (-0.8%) and communication services sector (-1.3%) finished as the worst-performing S&P 500 sectors.

The consumer discretionary sector also faced pressure in some of its more rate-sensitive components, such as Carvana (CVNA 62.74, -2.84, -4.32%) and DoorDash (DASH 177.73, -10.31, -5.48%), as rising oil prices put upward pressure on Treasury yields again today.

Unsurprisingly, the energy sector (+1.2%) outperformed amid the bump in oil prices, with crude oil futures settling today's session $1.86 higher (+2.2%) at $86.85 per barrel. Crude remained supported throughout the session after President Trump renewed threats of strikes against Iranian infrastructure, while Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that regional infrastructure would not be safe if such attacks were carried out, keeping geopolitical tensions elevated.

EQT Corp. (EQT 54.04, +4.24, +8.50%) was also a post-earnings standout after the company modestly missed EPS expectations but signed a five-year offtake agreement with a large Asian integrated energy company during the second quarter, among other deals.

Other notable earnings movers included Wabtec (WAB 289.98, +26.45, +10.04%) and CME Group (CME 249.24, +11.86, +5.00%) to the upside, while GE Vernova (GEV 987.08, -91.73, -8.50%) moved sharply lower.

Meanwhile, the materials sector (+1.5%) outperformed as precious metal prices rose today, while the utilities sector (+2.3%) captured the widest gain despite the bump in Treasury yields, as electrical utility names such as NRG Energy (NRG 139.93, +8.33, +6.33%) and Constellation Energy (CEG 274.90, +12.68, +4.84%) continued to benefit from optimism surrounding AI-driven electricity demand.

The Russell 2000 (-1.0%) lagged significantly, while the S&P MidCap 400 finished flat.

Overall, today's subdued action did little to alter the market's recent trend, with the S&P 500 continuing to hover near the 7,500 level after spending much of the past month in a relatively tight trading range. Investors will now turn their attention to earnings from Alphabet (GOOG 341.91, -4.28, -1.24%) and Tesla (TSLA 374.13, -4.80, -1.27%), which should provide the market's next meaningful catalyst and offer further insight into AI spending, monetization, and broader capital spending trends.

U.S. Treasuries continued this week's retreat on Wednesday with yields on 2-year, 3-year, and 7-year notes joining the 5-year note yield at fresh highs for the year, reflecting worries about more persistent inflation from the price of oil, which has risen steadily over the past three weeks. Treasuries finished the session just above their morning lows with longer tenors dipping back to those levels after the U.S. Treasury reopened $13 billion in 20-year bonds to lukewarm demand. The 2-year note yield settled up four basis points to 4.30%, and the 10-year note yield settled up three basis points to 4.66%.

• Russell 2000: +19.3% YTD
• S&P Mid Cap 400: +14.5% YTD
• Nasdaq Composite: +10.5% YTD
• S&P 500: +9.6% YTD
• DJIA: +8.7% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 1.9%; Prior -2.7%