Dow Jones Shrugs Off Oil Shock While Nasdaq Takes a Breather

If you were hoping for a repeat of Tuesday's chip-fueled rally, Wednesday had other plans.

The major indexes are moving in different directions on Wednesday morning as an oil price spike and anticipation of key earnings reports create a split market. The Dow Jones Industrial Average (DJINDICES: ^DJI) is up 0.2%, gaining support from traditional blue chip stocks. The S&P 500 (SNPINDEX: ^GSPC) is barely positive at 0.1%, caught between strength in industrials and weakness in technology. The Nasdaq Composite (NASDAQINDEX: ^IXIC) is down 0.1%. The tech-heavy index is taking a breather after the proverbial Silicon Valley carried the market yesterday.

The morning started rough. All three indexes opened lower, with the Nasdaq briefly dipping 0.6% before lunch. But the Dow found its footing early, climbing as high as 0.5% around 10:00 a.m. ET. The Nasdaq clawed its way back from the depths, even briefly turning positive before settling into negative territory again. As of this writing, it's a narrow 0.3% spread from the Dow's gains to the Nasdaq's drop.

^DJI data by YCharts

Middle East tensions send energy prices soaring

Rising oil prices and elevated interest rates are creating headwinds for growth stocks today, particularly in the technology sector. Brent crude is hovering near $94 per barrel, up about 4%, after President Trump threatened to target Iranian infrastructure every time Iran attacks a ship in the Strait of Hormuz.

The energy shock is bringing back inflation worries and keeping the 10-year Treasury yield stuck at 4.6%, which is exactly what growth stocks don't need right now. Many tech companies would love easy access to low-interest loans and other funding right now, in order to invest in AI computing infrastructure. That's just not on the menu.

Image source: Getty Images.

But some stocks are bucking the downtrend. Super Micro Computer (NASDAQ: SMCI) is having a fantastic day, up 17.5% after raising guidance due to record AI server orders. AT&T (NYSE: T) gained 3.6% after beating quarterly profit estimates and announcing a $10 billion accelerated share repurchase program for 2026.

Nvidia (NASDAQ: NVDA) is up 2.6%, single-handedly lifting both the S&P 500 and Nasdaq. Chipmaking partner Wistron is opening a new assembly facility in Texas, boosting Nvidia's domestic manufacturing capacity. On the other hand, Microsoft (NASDAQ: MSFT) is a drag on all three indexes with a 2.1% price drop. Macroeconomic concerns weigh on the software titan today.

What's next?

The third earnings season of this calendar year is in full swing with many heavyweights slated to release results over the next couple of weeks. Magnificent 7 reports are likely to move the top indexes, starting with Tesla (NASDAQ: TSLA) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) after the closing bell tonight. The remaining Magnificent 7 names are slated for next week, apart from Nvidia's late-August update. By the end of July, investors will have a better idea of how the AI boom is working out for operators at different steps of the supply chain.

Meanwhile, Wall Street keeps wobbling in the short term. The Iranian conflict adds a thick layer of economic uncertainty. The market is stuck in wait-and-see mode, split between old-economy resilience and new-economy jitters.

Anders Bylund has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.