Alphabet Drops Ahead of Key Earnings Report

The US stock market drifted in mixed trading Wednesday, while oil prices climbed another 3% as fighting continued in the war with Iran.

• The S&P 500 rose 10.24 points, or 0.1%, to 7,498.96 after swinging between modest losses and gains.
• The Dow Jones Industrial Average slipped 6.06 points, or less than 0.1%, to 52,218.58.
• The Nasdaq composite fell 146.30 points, or 0.6%, to 25,690.90.

Despite the modest moves for indexes, stocks had some big swings underneath the surface, the AP reports. Philip Morris International rallied 3.3% after the seller of Marlboro cigarettes reported stronger profit and revenue for the latest quarter than expected. Its shipments of smoke-free products rose 7.5%.

AT&T climbed 3.5% after reporting a stronger profit than analysts expected. CEO John Stankey also said the telecom is accelerating plans to send roughly $10 billion to its shareholders this year through the buybacks of its stock. Super Micro Computer soared 19.8% after the seller of AI servers said it expects to report stronger profit margins for the latest quarter than it had earlier forecast. It, though, also said that revenue will likely come in at the low end of its forecasted range of $11 billion to $12.5 billion. On the losing side of the market was GE Vernova, which fell 8.7% after reporting a weaker profit for the latest quarter than analysts expected.

Alphabet sank 1.2% ahead of its earnings report, which arrived after trading ended for the day. Anticipation was high, and not just because the parent company of Google is one of the largest stocks on Wall Street. It's also one of the biggest spenders on artificial-intelligence technology. Investors are looking for signs that the deluge of dollars going into processors, computer memory, and other building blocks of the AI boom are producing enough profits to make the investments worth it. If Alphabet and other "hyperscalers" say that isn't the case, stocks of chip companies and other AI winners would look very expensive following their monumental moves higher.

• Such worries have kept AI stocks at the center of Wall Street's swings for weeks, and they helped drag the market up and down Wednesday. Micron Technology swung between a loss of 3.6% and a gain of 1.2% before finishing with a drop of 1.2%. That's after it jumped 14.4% in the first two days of this week to reclaim nearly all of its 13.3% plunge from the week before. It's still up 236% for the year so far.

The price for a barrel of Brent crude oil, the international standard, rose 3.4% to $94.07 after briefly topping $95 in the morning to touch its highest price in nearly six weeks. That's up from less than $72 early this month, which is roughly where it was before the war with Iran. Rising oil prices are threatening a reacceleration of inflation. That in turn could push the Federal Reserve and other central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments. The auto club AAA said Wednesday that the average price for a gallon of regular gas in the US jumped again overnight to $4.06. That's still below highs of around $4.56 per gallon in May, but it had been below $3 before the US and Israel attacked Iran in late February.