US Stocks Edge Higher Despite Escalating Iran Tensions
US stock futures edged higher in overnight trading on Wednesday as investors brushed off fresh US-Iran clashes and focused on Big Tech earnings. Alphabet's shares declined despite posting better-than-expected second-quarter results due to a higher full-year capex outlook, while Tesla missed profit estimates and IBM trimmed its annual sales outlook.
Oil prices climbed higher, with Brent crude futures expiring in September up nearly 2% to $95.86 per barrel at the time of writing. The escalating tensions in the Middle East continued to escalate, dampening hopes for US-Iran peace talks and fueling concerns about energy flow through the Strait of Hormuz.
Markets are now awaiting results from Microsoft Corp., Meta Platforms Inc., and Amazon.com Inc. for cues on whether AI investments are translating into strong results. Gene Munster, managing partner and co-founder at Deepwater Asset Management, said higher capex spending is positive for the AI infrastructure trade, while Ulrike Hoffmann-Burchardi from the UBS Chief Investment Office remains constructive on AI's growth story.