Dow and S&P 500 climb as earnings season heats up; Alphabet jumps, Semi Micro sinks

US equity benchmarks rose on Wednesday as investors assessed a string of earnings reports and waited for more results from megacap technology companies. 

At the time of writing, the Dow Jones Industrial Average was up 0.3%, while the S&P 500 index rose 0.1% from the previous close.

The Nasdaq Composite was slightly higher than the previous session. 

Shares of Alphabet soared after the company posted positive earnings results. Elsewhere, AMD’s shares fell as its fourth-quarter earnings failed to impress investors. 

The broader semiconductor sector was in the red as shares of Super Micro Computer plunged 32% on Wednesday. 

Additionally, investors will look out for earnings results from major companies such as Meta Platforms and Microsoft later on today.

Apple and Amazon are expected to release their results on Thursday. 

CFRA Research chief investment strategist Sam Stovall told CNBC:

Economic data releases

On Wednesday, data showed that the US economy grew at a slower-than-expected rate in the third quarter. 

GDP rose 2.8% in the third quarter in the US, while analysts had expected the economy to rise by 3.1%. 

The weaker data augurs well for rate cut expectations from the US Federal Reserve at its upcoming meetings for the rest of this year.

The cooling of the economy could prompt the Fed to cut rates more. 

However, the US payrolls data released on Wednesday indicated that the labour market is still resilient.

According to the ADP report, private jobs creation in the US for October jumped to its highest level in more than a year. 

Meanwhile, uncertainty around the outcome of the US Presidential election next week is likely to weigh on the equity averages in the US. 

Alphabet’s shares surge

Shares of Alphabet surged nearly 6% on Wednesday after the company posted positive earnings results for the third quarter. 

The company beat expectations for revenue and profit on strength in its cloud business and YouTube advertising sales. 

Meanwhile, stocks of chipmakers fell sharply on Wednesday. Shares of Advanced Micro Devices fell 8.9%. 

Shares fell after the company’s forecasts for fourth quarter revenue and AI chip sales disappointed investors. 

The semiconductor company posted a revenue of $6.82 billion, which exceeded expectations of LSEG analysts of $6.71 billion.

The adjusted earnings per share of 92 cents per share was in line with consensus estimates. 

Other chip stocks also fell with NVIDIA shares dropping more than 2% and the Philadelphia SE Semiconductor Index slumped nearly 3%. 

Super Micro Computer sheds 33%

Shares of Super Micro Computer plummeted 32% after disclosing in a regulatory filing that Ernst & Young (EY) resigned as its accounting firm. 

EY was concerned about the AI server company’s “commitment to integrity and ethical values”. 

Super Micro Computer’s stock was added to the S&P 500 in March this year. 

Oil prices surge 2%

Oil prices regained some ground on Wednesday as the Organization of the Petroleum Exporting may delay the planned increase in production from December. 

According to a Reuters report, OPEC+ may delay its 180,000 barrels per day planned increase in output by a month. 

Sources told Reuters that the oil market is not “healthy enough” to accept an increase in crude oil production. 

At the time of writing, the West Texas Intermediate crude was at $68.61 per barrel, up 2.1%, while Brent crude was 2% higher at $72.14 per barrel.