New York: The US stock market edged higher on Wednesday as strong profit reports from SpaceX, Capital One Financial and other major companies helped offset disappointing updates from Netflix and AT&T.
The S&P 500 rose 0.2 per cent and was on track for a third consecutive modest gain. The Dow Jones Industrial Average was down 40 points, or 0.1 per cent, while the Nasdaq Composite was up 0.6 per cent as of 9.35 am Eastern time.
SpaceX led gains, climbing 9.2 per cent after reporting a stronger summer profit than analysts had expected. Elon Musk, who leads the rocket and artificial intelligence company, also said SpaceX had taken a step towards considering a possible merger with Tesla, his electric-vehicle company.
Tesla, which was due to report its latest quarterly results late Wednesday, rose 2.6 per cent and was among the strongest contributors to the S&P 500's gains.
Other companies that rose after reporting better-than-expected profits included Capital One Financial, up 2.3 per cent, and Winnebago Industries, which gained 5.1 per cent.
Expectations for summer profit growth are high, and companies will need to meet them to justify the sharp gains in stock prices towards record levels, despite concerns about high inflation, elevated interest rates and other challenges facing Wall Street.
Winnebago reported a more resilient profit than analysts had expected, even as high fuel prices and subdued consumer interest weighed on demand for recreational vehicles. Chief Executive Michael Happe said its more expensive towable RVs were proving harder to sell, while customers remained interested in its “more accessible” offerings.
Netflix fell 4.7 per cent despite reporting a stronger profit than analysts had expected. Investors focused on concerns that its momentum could be slowing after its revenue growth forecast for the final three months of the year fell short of expectations.
AT&T dropped 4.9 per cent despite beating quarterly profit estimates. Its forecast for full-year growth in an underlying earnings measure fell short of some analysts' expectations.
Shares in artificial intelligence companies, which have driven much of the market's recent activity, were relatively steady. After leading the broader market for years, the sector has faced volatility amid concerns that the expansion of data centres could slow as borrowing costs rise.
CoreWeave, which borrows money to buy AI chips and rents them to customers through cloud services, added 0.1 per cent on Wednesday after fluctuating between a 6 per cent loss and a 5 per cent gain a day earlier.
Super Micro Computer, which sells AI servers and services, rose 13.2 per cent after forecasting stronger summer revenue than previously expected, citing “increased demand for AI platforms”.
A slight easing in Treasury yields also offered some support to the sector by helping to reduce borrowing costs. The yield on the 10-year Treasury fell to 5.09 per cent from 5.12 per cent late Tuesday, but remained well above its 3.97 per cent level before the war with Iran drove up oil prices and inflation concerns.
Oil prices remained volatile amid uncertainty over when energy markets could return to normal. Brent crude fell 0.4 per cent to $108.31 a barrel after briefly rising above $111 earlier in the morning. Prices have fluctuated between $97 and $112 in October.
Overseas, European indexes rose after a mixed session in Asia. South Korea's Kospi jumped 3.3 per cent as AI stocks recovered.
