Stocks Waver Near Records as Oil Prices Hold Steady
NEW YORK — US stocks meandered to a mixed finish on Wall Street Wednesday, hovering near record levels as oil prices held steady amid ongoing diplomatic efforts to reopen the Strait of Hormuz. The uncertain trading followed two days of big gains that gave the week and August a strong start, with several large technology companies slumping and weighing down the broader market.
The S&P 500 fell 12.97 points, or 0.2%, to close at 7,723.55, after spending most of the day higher following Tuesday’s record surge. The Dow Jones Industrial Average rose 263.24 points, or 0.5%, to 54,349.12, reaching another record high, while the Nasdaq fell 221.55 points, or 0.8%, to 26,363.44, snapping a four-day rally, according to AP News.
Record Rally and Market Momentum
Tuesday’s surge marked a significant milestone for Wall Street. The S&P 500 climbed 1.8% to top 7,700 for the first time, surpassing its previous record of 7,620.90 set on June 2. The Dow also set a record, climbing 1.7% to 54,085.88, while the Nasdaq composite jumped 2.6%. The benchmark index has risen 12.80% so far in 2026, comfortably beating its historical average of about 10.5%, as Al Jazeera reported.
“The coiled spring investors have been waiting for has finally released, with the S&P 500 Index surging to record highs for the first time in two months,” said Mark Hackett, chief market strategist at Nationwide.
The rally has been fueled by strong corporate earnings, with three-quarters of S&P 500 companies having reported results so far. Wall Street expects profit growth of 50% when all are finished, AP News reported.
Tech Sector Shifts
Big technology names drove much of Wednesday’s volatility. Alphabet, Google’s parent company, dropped 4% on an overhaul of its AI leadership, while Microsoft fell 1.1%. Elon Musk’s SpaceX fell 13.6% following its first quarterly report as a public company, which showed sharply boosted spending on artificial intelligence.
However, SpaceX’s announcement that it would exclusively use Nvidia chips for its AI technology gave the semiconductor giant a 3.4% boost. That news weighed on Advanced Micro Devices, which fell 7%, as Yahoo Finance detailed.
Other notable movers included Walt Disney Co., which rose 3.6% after beating profit forecasts helped by a $1 billion box office haul from “Toy Story 5” and theme park revenue, and Booking Holdings, which jumped 6.6% on strong travel demand.
Oil Prices and the Strait of Hormuz
Oil prices remained relatively steady Wednesday, with Brent crude, the international benchmark, falling just 0.1% to $79.45 a barrel. Prices have been swinging dramatically for months, reaching as high as $102 per barrel during the US-Iran conflict, which jolted already stubbornly high inflation, AP News reported.
The stability in oil prices reflects growing hopes for a diplomatic resolution to the Strait of Hormuz crisis. Iran and Oman have agreed on geographic coordinates for a shipping route through the strategic waterway, with a joint announcement being finalized provided no third parties interfere, according to Iran’s foreign ministry spokesperson Esmaeil Baghaei, as The Guardian reported.
The proposed deal would have ships enter the Persian Gulf through an Iranian-controlled route and exit through an Oman-controlled route, with service fees charged for security and maritime environment preservation. The US has strongly opposed any arrangement where Iran charges fees.
President Donald Trump said a deal to reopen the strait could come “tomorrow or the next day,” though there have been many stops and starts during the five-month-old conflict that has stifled the global supply of oil. The strait carried about one-fifth of global oil supplies before the war began on February 28.
Economic Outlook
The Federal Reserve has been holding its key benchmark rate steady as it monitors inflation costs, with Wall Street expecting the central bank to raise rates at least once before the end of 2026. Household spending remains resilient despite stress from higher costs on everything from gas to groceries.
Private employers added 44,000 jobs in July, below estimates of 65,000, with the monthly employment report for July due Friday. Treasury yields slipped in the bond market, with the 10-year Treasury falling to 4.61% from 4.63% late Tuesday.
What to Watch
Investors will be closely monitoring Friday’s monthly employment report for further signals on the economy’s health. The ongoing negotiations over the Strait of Hormuz remain the key geopolitical wildcard, with a senior Gulf official telling CNN there is a “50-50” chance a deal will be reached on Friday.
As Al Jazeera’s explainer noted, even if an agreement is reached, it would not immediately resolve the broader US-Iran conflict. “The region feels like a high-speed roller-coaster,” said Abas Aslani, senior research fellow at the Center for Middle East Strategic Studies. While a Hormuz deal would be “a good start,” it “will not magically solve all the issues.”
Market analysts remain cautious about the sustainability of the rally. “The market appears to be moving from rewarding companies for AI spending to assessing the revenue and earnings that these investments can generate,” said Brian Therien, analyst at Edward Jones.
For now, Wall Street’s resilience reflects investor confidence amid ongoing economic uncertainty — but the path forward remains heavily dependent on developments in the Middle East and the trajectory of corporate earnings in the weeks ahead.