The S&P 500 index notched another record closing high on Tuesday, defying weakness in semiconductor stocks and mixed earnings from key sectors. As corporate earnings season gains momentum, investor focus is split between short-term volatility in tech and longer-term confidence in the U.S. equity market.
At 4:00 p.m. ET (20:00 GMT):
Dow Jones Industrial Average rose 170 points, or 0.40%
S&P 500 edged up 0.03% to close at a record 6,307.67
NASDAQ Composite dropped 0.4%
The divergence in performance was largely driven by a pullback in chip stocks, while strength in industrials and defense helped prop up the broader market.
Semiconductor names led the decline after The Wall Street Journal reported that SoftBank (TYO:9984) and OpenAI scaled back their ambitious plans for a $500 billion “Stargate” AI computing project.
Initially unveiled in January as a transformational multi-node supercomputing infrastructure for artificial intelligence, the revised plans now involve a single, smaller data center buildout. The downsized initiative has cooled investor enthusiasm about near-term infrastructure demand and the AI hardware supercycle.
Affected stocks included:
NVIDIA Corp (NASDAQ: NVDA)
Broadcom Inc (NASDAQ: AVGO)
Advanced Micro Devices (NASDAQ: AMD)
Sentiment in the space could shift later this week with earnings from Texas Instruments (NASDAQ: TXN), which reports after Tuesday’s closing bell.
Investors are now closely watching corporate earnings for Q2. So far:
12% of the S&P 500 has reported
86% have exceeded per-share earnings estimates
67% have reported higher-than-expected sales
This strong start to earnings season supported the prior session's gains in both the S&P 500 and Nasdaq, although earnings from individual names showed mixed performance on Tuesday.
Coca-Cola (NYSE: KO): Stock slipped nearly 1%. Despite beating Q2 earnings estimates and projecting full-year earnings at the high end of guidance, the company faces tariff-related cost pressures.
General Motors (NYSE: GM): Shares declined after reporting a sharp year-over-year drop in quarterly profits, driven by underperformance in its key North American market.
Northrop Grumman (NYSE: NOC): Rose after raising its annual profit forecast, citing continued demand for military aircraft and defense systems amid global tensions.
Philip Morris International (NYSE: PM): Fell as Q2 revenue missed expectations despite growth in its smoke-free product portfolio.
The S&P 500’s resilience highlights market confidence in U.S. corporate fundamentals, even as AI enthusiasm faces temporary recalibration. The revised Stargate project underscores the gap between long-term vision and short-term feasibility in AI infrastructure development.
With over 85% of the S&P 500 yet to report, this week remains crucial for market direction. Eyes will be on tech and consumer giants, while earnings surprises—both positive and negative—are likely to create sector-specific volatility.
