U.S. stocks traded mixed on Wednesday as investors rotated out of technology and into blue-chip names while awaiting another wave of Big Tech earnings. The Dow Jones Industrial Average rose about 0.6%, supported by defensive and value-oriented stocks, even as risk appetite remained fragile across growth sectors.
By contrast, the S&P 500 slipped roughly 0.3%, and the Nasdaq Composite dropped more than 1%, extending losses from the prior session. Technology stocks continued to feel pressure as concerns mounted that artificial intelligence could become a margin headwind rather than a growth catalyst, especially for software and chipmakers.
Market Movers:
- Advanced Micro Devices (AMD) -17%: Shares plunged after the chipmaker delivered a weaker-than-expected outlook, reviving concerns about its ability to compete with Nvidia in AI accelerators. Investors focused on slowing momentum in data center demand just as expectations around AI spending are being reset.
- Nvidia (NVDA) -4%: Shares slid as broader skepticism around the AI trade continued to weigh on megacap tech names. Even relatively modest declines in Nvidia have rippled across the sector, given its central role in AI infrastructure spending.
- Eli Lilly (LLY) +10%: Shares surged after the drugmaker issued an upbeat 2026 profit forecast driven by strong demand for its weight-loss and diabetes treatments. The guidance reinforced confidence in Lilly’s growth trajectory and sharply contrasted with weakness across technology stocks.
- Microsoft (MSFT) +1%: The stock edged higher as investors viewed Microsoft as more resilient amid AI disruption fears hitting software peers. Its diversified revenue base and cloud scale helped insulate shares from the broader sell-off.
- Gold Futures (GC=F) -0.1%: Gold slipped as its rebound attempt stalled following a sharp recent sell-off from record highs. Ongoing volatility in precious metals has continued to add cross-asset uncertainty for investors.
AI Disruption Fears Continue to Pressure Tech
Markets remain uneasy after a steep sell-off in software stocks sparked by concerns that rapidly advancing AI tools could disrupt traditional business models. Even earnings beats have struggled to lift shares unless companies can clearly demonstrate that AI will drive revenue growth rather than compress margins.
That anxiety has rippled beyond software into semiconductors, where expectations remain high, and tolerance for disappointment is low. Investors are increasingly selective, rewarding firms tied to physical AI infrastructure while punishing those seen as vulnerable to disruption.
Earnings Spotlight Shifts to Alphabet
Attention now turns to results from Alphabet, due after the market close, with investors focused on cloud growth and AI monetization. The report is expected to help shape near-term sentiment for both Big Tech and the broader Nasdaq. After Alphabet, the countdown begins for earnings from Amazon, keeping pressure on technology stocks to justify heavy capital spending with tangible returns.
Economic Data Adds Another Layer of Uncertainty
Outside earnings, a weaker-than-expected private payrolls report hinted at potential cracks in the labor market, adding to investor caution. With federal jobs data delayed due to the recent partial government shutdown, private indicators are carrying more weight than usual. Gold prices remained volatile as geopolitical tensions lingered, but the metal struggled to regain momentum after a sharp recent sell-off, offering little support to risk sentiment.
Looking Ahead
Markets appear stuck between rotation and hesitation as investors weigh AI optimism against rising disruption risks. Alphabet’s earnings could provide clarity — or deepen uncertainty — around whether AI remains a net positive for Big Tech profits. Until then, traders are likely to favor defensives and selectively positioned AI infrastructure names, while volatility in tech remains elevated as expectations reset.