U.S. Stocks Slip on AI Capex, Oil Prices and Middle East Tensions

U.S. equity markets showed mixed performance as investors grappled with several headwinds. Concerns over massive artificial‑intelligence capital spending pressured the Nasdaq, which fell about 0.6 % while the Dow Jones managed a modest rise and the S&P 500 edged up only fractionally. The VIX jumped 17 % to 20.3 points, reflecting heightened volatility.

Energy prices added to the uncertainty. Brent crude dropped roughly 4 % after briefly breaching the $100‑per‑barrel level amid escalating tensions in the Strait of Hormuz and broader Middle‑East conflict. The pull‑back in oil helped ease some inflation pressure but left currency markets jittery.

Corporate earnings were mixed. The “Magnificent 7” mega‑caps posted their weakest valuation spread versus the broader market in more than a decade, and several tech giants missed earnings expectations after announcing larger‑than‑expected AI capex. Meanwhile, defense contractors RTX and Lockheed Martin posted earnings beats and record backlogs, underscoring a divergent trend between technology and defense sectors.

Geopolitical developments continued to influence sentiment. A renewed U.S. blockade of Iranian shipping through the Strait of Hormuz and reports of attacks on Saudi vessels revived oil‑supply worries, while China announced export controls on dual‑use goods to the EU, adding another layer of trade tension.