Key insights
- US stocks showed mixed performance as investors digested a significant capital raise by Alphabet to fund AI infrastructure and a private placement by Berkshire Hathaway, which analysts viewed negatively. Geopolitical uncertainty surrounding Iran talks and mixed signals from manufacturing data also contributed to market indecision. While AI enthusiasm provided some support, the large equity offerings and broader geopolitical risks created a balanced outlook for the immediate market direction.
Investing.com -- U.S. stocks on Tuesday looked for direction after opening marginally lower, as investors sifted through a bevy of tech-sector headlines as well as mixed messaging regarding talks to end the war in Iran.
At 09:40 ET (13:40 GMT), the benchmark S&P 500 index was down 0.2% to 7,585.27 points, the tech-heavy NASDAQ Composite slipped 0.5% to 26,944.49 points, and the blue-chip Dow Jones Industrial Average ticked up 0.2% to 51,196.08 points.
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The main averages on Wall Street finished slightly higher in the prior session, with equities rebounding after U.S. President Donald Trump asserted that negotiations with Iran were on track despite earlier reports that Tehran had cut off sending mediated messages to Washington.
Sentiment was supported by technology shares, which have been buoyed by widespread enthusiasm around the growth and capabilities of artificial intelligence. Claude-creator Anthropic became the latest company to announce a massive initial public offering at a valuation that neared $1 trillion.
At the same time, new data indicated that the U.S. manufacturing sector activity has been broadly resilient in the face of headwinds from the Iran war.
Alphabet unveiled a sweeping plan to raise $80 billion in equity capital, as the tech giant aims to bankroll the skyrocketing costs of its artificial intelligence infrastructure.
The offerings consist of a $30 billion underwritten public offering -- split between depositary shares representing mandatory convertible preferred stock, Class A common stock, and Class C capital stock -- and a $40 billion at-the-market offering expected to launch in the third quarter of 2026.
Conglomerate Berkshire Hathaway has also agreed to inject $10 billion through a private placement, a detail that analysts at Vital Knowledge flagged as an "ultimately negative" sign.
"[I]f the greatest business model in the history of capitalism (in terms of scale, growth, margins, and cash flow) can’t fund AI from its own internal operations, then who possibly can?" the analysts argued in a note.
Class A shares of Alphabet were down 4% after the opening bell.
Elsewhere, shares in Marvell Technology soared by more than 20%. Nvidia CEO Jensen Huang suggested that the semiconductor player could be the next "trillion-dollar company." As of the last close, Marvell’s market cap stood at a little under $192 billion.
Huang also claimed that Nvidia has enough supply to meet runaway growth in AI-fueled demand for central processing units and graphics processing units. Nvidia shares were up nearly 1% after the open.
Hewlett Packard Enterprise, meanwhile, posted record second-quarter results and accelerated its long-term financial goals by two years, as expansion of AI data centers boosts demand for its servers and networking products. Shares rocketed 31.3% higher.
"[T]he headlines coming out of the [semiconductor’s] patch and [s]oftware feel somewhat like Iran. Multiple times a day there are ‘game changing headlines’ that spark some sort of massive rotation. Only to be refuted/changed later," analysts at Mizuho said in a note.
Turning to the Middle East, Lebanon has announced a partial ceasefire between Iran-backed Hezbollah militants and Israel, although Israel’s military said it had intercepted two projectiles fired from Lebanon on Tuesday, according to Reuters.
Citing Lebanon’s embassy in Washington, Reuters reported that truce was limited and would not end the fighting in Lebanon, which has become a sticking point in peace negotiations between the U.S. and Iran. The embassy called on Israel, an ally of the U.S., to refrain from striking Beirut and Hezbollah-controlled suburbs, the report said.
Along with launching a joint assault with the U.S. on Iran in late February, Israel has also sent military forces into southern Lebanon.
President Trump has stressed that Hezbollah had promised, through mediators, not to attack Israel. Meanwhile, Israeli Prime Minister Benjamin Netanyahu has pledged to pull back from assaulting Beirut, Trump claimed.
Earlier, the president told ABC News on Monday that he thinks a peace deal with Iran that would extend an ongoing ceasefire and reopen the Strait of Hormuz could happen "over the next week," after a report said Tehran had stopped communications with Washington.
The president said “there was a little glitch,” likely referring to Iran’s objection to Israeli aggression against Lebanon, which had reportedly spurred Tehran’s walking away from negotiations.
It was not immediately clear whether U.S.-Iran negotiations had restarted. Iran’s Fars News Agency reported that there was currently no exchange of messages with the U.S., citing an informed source. The agency said the exchange had been stopped for at least a few days in order to reach a preliminary memorandum of understanding between Washington and Tehran, citing the source.
Ambar Warrick and Scott Kanowsky contributed to this article
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