U.S. stocks traded mixed on Wednesday, with tech giants facing a significant pullback due to raised geopolitical tensions. At 09:55 ET, the Dow Jones Industrial Average rose 60 points, or 0.1%, while the S&P 500 dropped 50 points or 0.9%, and the NASDAQ Composite slumped 325 points or 1.8%.

Tech Stocks Sharply Lower:

Tech stocks led the losses after Bloomberg reported potential U.S. restrictions on exporting critical chipmaking equipment to China. Additionally, Donald Trump’s comments about Taiwan paying for U.S. defence equipment led to a sharp drop in Taiwan Semiconductor Manufacturing (NYSE) premarket. Trump remarked in an interview with Bloomberg Businessweek that Taiwan should compensate the U.S. for military support, raising concerns over geopolitical stability.

Dutch lithography equipment maker ASML (NASDAQ) also fell, despite reporting a strong second quarter, with nearly half of its sales coming from China. This drop highlights the significant downside risk if tighter restrictions are imposed.

Earnings Season Continues:

The earnings season continued with mixed results:

  • Johnson & Johnson (NYSE): Stock rose 2.5% after the healthcare giant reported strong Q2 earnings and revenue, driven by robust drug sales.
  • Spirit Airlines (NYSE): Stock fell over 8% after the airline lowered its Q2 revenue outlook, citing weaker-than-expected non-ticket revenue.
  • JB Hunt (NASDAQ): Stock dropped 5% after reporting a 24% decline in Q2 profit and a 7% decrease in total operating revenue.
  • Five Below (NASDAQ): Stock slumped 15% after announcing CEO Joel Anderson’s departure and preannouncing Q2 guidance that fell short of estimates.

Crude Gains:

Crude prices climbed as signs of tighter U.S. supplies emerged, helping offset concerns over weakening demand globally, particularly in China. By 09:55 ET, U.S. crude futures rose 1.5% to $80.87 a barrel, while Brent crude fell 1.2% to $84.69 a barrel.

U.S. crude oil inventories fell by 4.4 million barrels last week, according to the American Petroleum Institute, far exceeding expectations. This points to a tight market in the world’s largest oil producer and consumer. The U.S. Energy Information Administration will release its official storage report later in the session, which is expected to confirm the tight supply situation.