Futures gave back a chunk of Tuesday's AI-led ramp as oil spiked on escalating Iran strikes, leaving the tape flat-to-lower into tonight's Alphabet and Tesla prints.
Tuesday closed hot: the S&P 500 moved up 0.89% to 7,509.20, the Nasdaq Composite finished 1.29% higher at 25,837.21, with the Nasdaq 100 climbing 1.93% as chipmakers and AI-infrastructure shares drove the upturn, buoyed by attractive valuations and a strong opening to earnings season as 91% of S&P 500 companies surpassed Q2 forecasts, and Super Micro shares jumped 16% following strong AI infrastructure earnings. That strength didn't carry through — Brent crude climbed above $92 a barrel Wednesday after the U.S. carried out its 11th consecutive night of strikes on Iran, and Rubio said Washington was still willing to negotiate an end to the Iran crisis, but that Tehran was "not serious" about talks. The July 22 Polymarket contract implied just a 15% probability that the index would open higher, with traders increasingly positioning for a weaker start. By the cash open the fade had mostly reversed into chop — the Dow turned higher rising 0.3%, the S&P hovered near the flat line, and the Nasdaq Composite sank 0.3%, with SPX printing 7,507.77 shortly after 10am.
Live GEX isn't available this run, so treat levels as indicative. The tape's own fingerprint argues for thin, chase-driven flow rather than conviction — Tuesday's .9% move higher came with lower volume, which could indicate a lack of conviction behind the rally. That setup leaves dealers likely short gamma into a binary catalyst — Alphabet and Tesla report after the close, with International Business Machines Corp. also due to report later Wednesday — raising odds of an outsized post-print gap even if spot grinds sideways into 4pm.
The risk: a soft Alphabet cloud/capex read or Tesla guidance miss landing alongside Brent pushing further above $92 flips today's mixed tape into a clean risk-off unwind in the same AI-infrastructure complex that powered Tuesday's rally. The offsetting path is just as live — a ceasefire headline or oil rolling back paired with a credible capex payoff from Alphabet reopens the melt-up and squeezes anyone positioned for the 15%-odds down open.