US Stocks Slip as Oil Surges More Than 3% and Big Tech Earnings Loom

US stocks closed lower on July 22 as a surge in oil prices and caution ahead of earnings from major technology companies weighed on sentiment. AI server-related shares advanced, but weakness in megacap tech stocks dragged on the broader market.

The Dow Jones Industrial Average slipped 6.06 points, or 0.01%, to 52,218.58 at the close on the New York Stock Exchange.

The S&P 500 fell 10.24 points, or 0.14%, to 7,498.96, while the Nasdaq Composite dropped 146.30 points, or 0.57%, to 25,690.90.

Investors largely stayed on the sidelines ahead of second-quarter earnings from Alphabet and Tesla, which were due after the close. Traders were looking to those results for signs of whether heavy artificial intelligence spending is translating into revenue and profit growth.

Geopolitical tensions in the Middle East also pressured investor sentiment, sending oil prices sharply higher. Brent crude, the global benchmark, settled up 3.36% at $94.07 a barrel. West Texas Intermediate crude rose 2.95% to $86.83 a barrel.

Higher oil prices added to inflation concerns and pushed Treasury yields higher. The 10-year Treasury yield rose 0.03 percentage point to 4.657%, while the two-year yield climbed 0.04 percentage point to 4.301%. Markets were also wary of the possibility of a rate increase ahead of next week's Federal Open Market Committee meeting.

Among individual stocks, AI server maker Super Micro Computer jumped more than 19%. Dell Technologies rose in the 9% range and Hewlett Packard Enterprise gained in the 3% range, while Nvidia and Broadcom each advanced in the 2% range.

By contrast, memory-chip stocks that had surged a day earlier came under pressure from profit-taking. SK Hynix's American depositary receipts fell 3.88%, and Micron Technology declined 1.17%. Megacap tech stocks were also weaker, with Microsoft down 1.86%, Amazon falling 1.09%, Meta Platforms losing 2.58% and Alphabet dropping 1.46%.

After the close, Alphabet reported second-quarter results that topped market expectations. Revenue rose 24% from a year earlier to $119.8 billion, while earnings per share climbed to $9.11 from $2.31 a year earlier.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com