By Callum Keown, Kit Norton, and Connor Smith
Stocks traded sideways Wednesday. Chip and artificial intelligence stocks were a big drag on the major indexes. Federal Reserve Chairman Kevin Warsh declined to say whether an interest-rate hike would be announced at the central bank's meeting in July.
Progress Software jumped 17% after the company reported better-than-expected second-quarter earnings late Tuesday with updated full-year guidance that impressed Wall Street.
ServiceNow gained 6.6% to $105.80 and Salesforce advanced 4.2% to $163.23 after Guggenheim upgraded both stocks to Buy, with price targets of $125 and $228, respectively. The firm wrote that the belief AI will kill off software is a "hallucination" and that the "Armageddon scenario" is "misaligned with reality." AppLovin added 9.6% and Palantir Technologies rose 7.8%.
Meta Platforms advanced 8.8% on a report it plans to build a cloud business to sell excess artificial-intelligence computing capacity. Meta hopes to generate revenue from selling excess computing power to third parties, Bloomberg reported. Meta declined to comment to Barron's.
CoreWeave and Nebius both sank more than 13% as the Meta news put pressure on the so-called neoclouds that are also in the business of selling AI computing power.
Bending Spoons debuted Wednesday, rising 40% to $40.50 from its initial public offering price of $29. Bending Spoons is an Italian company that bought AOL in January and has built a digital media conglomerate via a series of acquisitions, including video sites Brightcove and Vimeo, ticket platform Eventbrite, and to-do list app Evernote.
Nike stock added 4.9% after the retailer reported fiscal fourth-quarter earnings late Tuesday. The company beat earnings and revenue estimates but analysts' expectations were low. Nike's earnings of 72 cents a share also included a benefit of 52 cents a share tied to the expected recovery of import tariffs.
Alcoa stock fell 8.9% after the aluminum producer agreed to buy Australian miner South32's aluminum, bauxite, and alumina assets for $4.1 billion. South32 shares closed 9.7% higher in Sydney trading.
General Mills rose 8.5% after the company reported better-than-expected fourth-quarter profit and said it was focused on organic sales growth in fiscal 2027 and beyond.
Many chip stocks and AI-adjacent shares got hit Wednesday.
Western Digital declined 6.3%, Applied Materials fell 10%, and Lam Research dropped 9.7%. Micron fell 11%. Intel, Nvidia, and Marvell Technology also all traded lower.
Shares of the optical networking company Corning sank 14%, making it the worst S&P 500 component. Memory chip maker Sandisk also was near the bottom of the S&P 500, falling 11%.
Advanced Micro Devices fell 6.9% to $540.88 after surging 7.7% Tuesday to close at a record high and with a market capitalization of $947 billion.
SpaceX dropped 7.8% to $157.54. Wedbush analyst Dan Ives launched coverage of SpaceX with a Buy rating and a $190 price target late Tuesday. Twelve analysts cover SpaceX, according to FactSet. Seven rate the shares Buy and the average analyst price target is about $240.
Write to Callum Keown at callum.keown@dowjones.com and Kit Norton at kit.norton@barrons.com
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