S&P 500, Dow Edge Higher As Bank Earnings Offset Middle East Oil Concerns — AAPL, SKHY, ASML, PYPL In Focus

• The S&P 500 ended 0.35% higher, while the Nasdaq 100 fell 0.62% and the Dow Jones Industrial Average added 0.26%.
• Brent crude held near $85.80 after rising on renewed concerns about the Strait of Hormuz ship blockade amid U.S.-Iran tensions. 
• PYPL surged sharply on reports of a potential $53+ billion take-private offer from Stripe and Advent International at a significant premium.

U.S. stock indices ended modestly higher on Wednesday as cooler-than-expected producer prices contributed to hopes for easing inflation, and solid earnings from big banks and chipmaking equipment maker ASML offset a sell-off in memory stocks.

The S&P 500 ended 0.35% higher, while the Nasdaq 100 fell 0.62% and the Dow Jones Industrial Average added 0.26%. The Russell 2000, which tracks stocks with small market capitalizations, increased 0.39%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) rose 0.4% and Invesco QQQ Trust (QQQ) ended Wednesday around 0.27% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) added 0.24%.

Meanwhile, the VanEck Semiconductor ETF (SMH) lost 1.59%, while the broader Vanguard Information Technology ETF (VGT) slipped about 0.52%, though big tech names Alphabet (GOOGL), Microsoft (MSFT), Amazon.com (AMZN), Meta (META) and Apple (AAPL) rallied over 2.5%, owing to significant selling in memory chip and semiconductor stocks.

Retail sentiment on Stocktwits for SPY, QQQ, and DIA stayed within 'bullish' zones, coupled with ‘normal’ message volumes.

US Market Drivers

The Producer Price Index for June fell 0.3% month-over-month — the largest decline in over a year — versus expectations for flat readings. Year-over-year, PPI rose 5.5%, below forecasts. The drop was led by goods prices, particularly energy. This followed Tuesday’s soft CPI and gave markets further comfort that inflation pressures are moderating, supporting the “soft landing” view and tempering aggressive rate-hike pricing.

Earnings season delivered clear positives in financials. Morgan Stanley and BlackRock posted strong beats, with BlackRock’s assets under management surging past $15 trillion. Banks’ blowout results stole some spotlight from Big Tech.

However, tensions in the Middle East kept oil prices elevated, which capped some of the upside. Brent crude held near $85.80 after rising on renewed concerns about the Strait of Hormuz ship blockade amid U.S.-Iran tensions.

While the broader market and certain AI-related names found support, memory stocks came under pressure — a key differentiator in Wednesday’s session. High-bandwidth memory (HBM) and DRAM stocks, which had surged on expectations of strong AI-driven demand, came under profit-taking pressure, including SK Hynix Inc. (SKHY), Micron Technology (MU), and Western Digital Corp. (WDC).

In contrast, semiconductor equipment maker ASML rallied after delivering a strong beat and raising its sales outlook on strong AI-driven customer spending.

Trending Stocks To Watch

PayPal (PYPL): Surged sharply on reports of a potential $53+ billion take-private offer from Stripe and Advent International at a significant premium. According to a report from Bloomberg, the company is working with Goldman Sachs and Evercore Inc to review strategic options, including a potential sale or breakup.

ASML Holding (ASML): Gained on its results and improved guidance, underscoring continued AI infrastructure investment. The Information also reported that the company is planning to raise prices on its critical lithography systems as it benefits from explosive demand for advanced chips used in artificial intelligence.

SK Hynix (SKHY): Shares of the memory chip maker closed down 9% after a whopping 27% rally on Tuesday. Shares of competitor Micron also closed 8% lower as part of the selloff across the memory segment.  

Apple (AAPL): The Cupertino, California-based tech giant is said to be exploring acquisitions of AI chip startups as it looks to strengthen its in-house server chip capabilities and has also reportedly approached semiconductor startups to gauge their interest in a sale. 

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