Dow hits record high as Nvidia rallies, S&P 500 slips from fresh peak

The Dow Jones Industrial Average closed at another record high on Wednesday, outperforming the broader market as gains in Nvidia and strong corporate earnings offset weakness in several major technology stocks.

The S&P 500 and Nasdaq Composite ended lower after pulling back from intraday highs, with investors digesting mixed earnings reports and fresh economic data while monitoring developments in the Middle East.

The Dow gained 264 points, or 0.49%, to close at 54,349.92.

The S&P 500 slipped 0.17% to 7,723.19 after briefly touching another record high earlier in the session, while the Nasdaq Composite fell 0.85% to 26,359.67, marking its first decline in five trading sessions.

The session interrupted the S&P 500's four-day winning streak, while the Dow extended its rally to a fifth consecutive session.

Nvidia jumps as SpaceX stumbles after earnings

Nvidia shares rose about 4% after SpaceX chief executive Elon Musk said the company would exclusively use Nvidia processors to build its artificial intelligence computing infrastructure.

The gain helped support the Dow even as SpaceX shares tumbled 13% despite reporting stronger-than-expected quarterly results.

Investors focused on the company's accelerating capital spending, which increased sixfold to $18.4 billion during the second quarter, with most of the investment directed toward AI infrastructure.

The stock also remained under pressure ahead of the expiration of its post-IPO lock-up period.

Advanced Micro Devices also declined around 6% after reporting second-quarter earnings and issuing third-quarter revenue guidance above Wall Street expectations.

Investors instead focused on questions surrounding the pace at which the company's heavy AI investments will translate into stronger growth.

Alphabet fell approximately 4% after announcing a restructuring of its artificial intelligence division and confirming the departure of chief scientist Jeff Dean after 27 years at the company.

Outside technology, healthcare stocks provided support to the broader market.

Amgen advanced after reporting a 9% increase in second-quarter sales, while Eli Lilly gained after raising its full-year revenue forecast.

Disney also moved higher following stronger-than-expected fiscal third-quarter earnings.

Economic data and Iran developments remain in focus

Investor sentiment continued to be influenced by hopes for easing tensions in the Middle East following reports of progress toward an agreement involving Iran and the Strait of Hormuz.

A proposed arrangement between Iran and Oman would reportedly give Tehran control over ships entering the Gulf through the strategic waterway.

Oil prices were little changed after Tuesday's sharp decline.

West Texas Intermediate crude settled down 0.73% at $75.22 per barrel, while Brent crude edged 0.11% higher to settle at $79.45 per barrel.

Economic data released during the session painted a mixed picture of the US economy.

The ADP National Employment Report showed slower private payroll growth in July ahead of Friday's closely watched nonfarm payrolls report.

Meanwhile, the Institute for Supply Management said its services purchasing managers' index rose slightly to 54.1 in July from 54.0 in June, remaining in expansion territory but coming in below economists' expectations.

Markets also continued to monitor the Federal Reserve outlook.

Expectations for a September rate hike eased to 54.9%, according to CME FedWatch data, as investors weighed labor market conditions, inflation risks linked to the conflict in the Middle East, and the latest comments from Federal Reserve officials.