Evening Digest: Alphabet AI research shakeup, SpaceX slides

Wall Street digested another busy day of corporate developments and macroeconomic news on Wednesday, with investors weighing a major leadership reshuffle at Alphabet, a sharp selloff in SpaceX despite strong earnings, and renewed moves across commodity markets.

Alphabet's researchers leaving raises AI concerns

Alphabet shares fell about 4% after the Google parent unveiled a sweeping leadership restructuring within its artificial intelligence division alongside the departure of several high-profile AI researchers.

The changes come as Google DeepMind continues to face scrutiny over delays to its flagship Gemini model, which remains unreleased despite an expected June launch.

The delay has heightened investor concerns that Google is losing momentum in the AI race against rivals Anthropic and OpenAI.

As part of the reorganization, Google DeepMind chief executive Demis Hassabis will become Alphabet's chief scientist while also serving as chairman of Google DeepMind.

Koray Kavukcuoglu, currently the unit's chief technology officer, will take over day-to-day management as senior vice president while retaining his position as Alphabet's chief AI architect.

At the same time, Jeff Dean, Sanjay Ghemawat, Oriol Vinyals and Quoc Le have left Alphabet to launch Discovery Loop, a public benefit corporation focused on machine learning, scientific research and engineering.

Discovery Loop plans to build software capable of automating scientific experimentation, initially focusing on machine learning before expanding into hardware engineering, clean energy and drug discovery.

The startup has also secured investment from Google and entered into a cloud computing partnership with Google's cloud division.

The departures add to a broader talent shift across the AI industry, with former Google researchers including Noam Shazeer and John Jumper recently joining OpenAI and Anthropic, respectively.

SpaceX stock falls despite earnings beat

SpaceX shares dropped 12% after investors looked past stronger-than-expected second-quarter results and instead focused on the company's accelerating AI spending.

The aerospace company reported a second-quarter loss of 9 cents per share, better than analysts' expectations for a 26-cent loss.

Revenue rose to $7.81 billion, topping the consensus estimate of $6.93 billion.

However, capital expenditures increased sixfold to $18.4 billion during the quarter, with most of the investment directed toward artificial intelligence initiatives.

AI spending exceeded $23 billion during the first half of the year, compared with $3.3 billion in the same period last year.

Revenue continued to be supported by growth in the Starlink satellite internet business, the company's only profitable operating segment.

Investors are also preparing for the expiration of SpaceX's post-IPO lock-up period on Thursday, when up to 911.5 million shares could become eligible for sale, substantially increasing the company's public float.

The decline followed a sharp rally earlier this week that had added more than $250 billion to SpaceX's market value.

Gold prices rally to seven-week high

Gold prices climbed to their highest level in almost seven weeks as lower Treasury yields and a weaker US dollar boosted demand for the precious metal.

Spot gold rose 4.24% to $4,248.90 an ounce after earlier touching $4,264.93, its highest level since June 18.

US gold futures settled 3.8% higher at $4,314.20 per ounce.

The rally came as optimism surrounding negotiations involving Iran reduced expectations of near-term interest rate hikes, while the dollar traded near six-week lows, making gold more attractive for overseas buyers.

Despite Wednesday's rebound, gold remains about 24% below its January record high and is down roughly 19% since the start of the Iran conflict.

Silver advanced 4.4%, while platinum and palladium also posted gains as hopes for easing geopolitical tensions supported the broader precious metals complex.

Oil prices ease on renewed Iran diplomacy hopes

Oil prices edged lower as investors weighed renewed signs of diplomatic progress surrounding the Strait of Hormuz against persistent risks to global shipping.

Brent crude was up by 0.13% to $79.46 a barrel, while West Texas Intermediate crude declined 0.82% to $75.14.

President Donald Trump said the United States held an "all-day negotiation" with Iran, describing the discussions positively while warning that military action remained possible if an agreement could not be reached.

Iran denied that formal peace talks were taking place but said it had reached an understanding with Oman on managing the Strait of Hormuz, with a joint announcement being prepared.

Crude prices also came under pressure after US government data showed crude inventories unexpectedly rose by 2.5 million barrels last week, compared with expectations for a 1.5 million-barrel draw.