Google Seizes the Spotlight Ahead of Earnings: 8 Key Items Shaping the Stock Market Wednesday
No end in sight for renewed U.S.-Iran pressures, Jensen Huang on China AI models and other headlines are moving stocks this morning.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a down market open later on Wednesday morning.
1. Oil rose above $95 a barrel on Wednesday, its highest level in six weeks, after Donald Trump threatened a new escalation of the Iran war and warned the US would soon launch an attack on a heavily fortified nuclear site. (FT)
Secretary of State Marco Rubio said that the United States would continue attacking Iran as long as it tried to control the Strait of Hormuz, and suggested that Tehran was “not serious” about diplomacy. (NY Times)
Iran’s Interior Minister Eskandar Momeni visited Pakistan — the main mediator in the conflict along with Qatar — on Tuesday but there was no sign his meetings had deescalated tensions. (Bloomberg)
With scant indications of any near-term resolution and oil prices moving higher, we are increasingly expecting renewed inflation tailwinds in the July data. The first look will be the Flash July PMI report later this week, but recognizing the usual collection dates, a more complete picture is bound to be found with the final July PMI data from ISM and S&P Global in early August. As we move deeper into the current earnings season, we will be mindful of fresh pricing action comments by companies and the roll through to inflation data in the coming months.
2. Alphabet will report earnings Wednesday, and Wall Street expects capital spending to double as the company builds the infrastructure needed to power artificial intelligence… Analysts surveyed by FactSet expect Alphabet, which will report after the close, to post adjusted earnings of $2.88 a share on revenue of $117.1 billion. Advertising revenue for the quarter is expected to rise 14% from the prior year to $81.3 billion, while search revenue is estimated to increase 17% to $63.4 billion. (Barron’s)
After how the market reacted to IBM’s (IBM) Q2 2026 earnings pre-announcement, we and the rest of Wall Street will be picking over Alphabet’s (GOOGL) Q2 2026 results and guidance. Consensus expectations call for the company to guide current quarter EPS to $3.00 on revenue of $123.9 billion. In addition to those top- and bottom-line figures, we will also be focusing on the company capex for the quarter, expectations for the balance of the year, and hints as to what spending is looking like for 2027. The market expects capex for the quarter to be $45.1 billion, which would be a 101% increase from the $22.4 billion in the same period last year.
As we look at those figures, we will be sizing up results at Google Cloud. Accelerating revenue would be proof that customers are spending for cloud services and AI services and should help justify the hyperscaler spending. We’ll also be eyeing margins at Google Cloud and what it says about the company’s ability to monetize cloud and AI as it brings on new capacity.
3. Tesla is set to report second-quarter earnings after Wednesday’s market close. For the period, Wall Street is looking for earnings per share of 55 cents and an operating profit of $1.7 billion from sales of $27.3 billion, according to FactSet. A year ago, Tesla reported earnings per share of 40 cents and operating profit of $923 million from sales of $22.5 billion. (Barron’s)
Tesla (TSLA) delivered about 480,000 cars in the second quarter of 2026, up 25% year over year, but the market is likely to focus on margins given higher costs as well as incentives. We’ve seen how the use of incentives to move homes has hit homebuilder margins. The other area of focus will be Tesla’s spending on AI, robo-taxis, and robots, and the impact on R&D and cash flow. While we don’t have a dog in this fight, we will be following compute and AI related comments, and what they mean for several of the Portfolio’s holdings.
4. Nvidia CEO Jensen Huang believes America has nothing to fear from China’s open-source AI models — and everything to fear from the growing campaign to ban them. “These Chinese models are excellent,” Huang told Axios’ Mike Allen on Tuesday in an exclusive interview for our “Behind the Curtain” video series. “Open-source models that are excellent should be used.” (Axios)
The above comment from Nvidia’s (NVDA) Jensen Huang could land him in some hot water. Maybe our memories are overly focused on security concerns for Huawei equipment in telecommunications networks a few years back, but there are reasons why companies and other entities should guard their data. We should also remember that while the U.S. government has cleared Nvidia’s H200 chips to China, so far Chinese regulators have placed strict limits on those imports.
5. An OpenAI “agent” discovered new vulnerabilities and hacked into start-up Hugging Face by itself, in one of the first public examples of a cyber attack by an AI system acting outside human control. The ChatGPT maker on Tuesday said the “unprecedented cyber incident” involved an agent — an AI program that can operate on its own based on human instructions — that escaped a testing environment, gained internet access and stole login credentials… OpenAI on Tuesday said it expected this type of incident to become “more commonplace with the proliferation of increasingly cyber-capable models.” (FT)
In our view, the above is going to raise more flags on AI models and safeguards around them. It should also boost concerns over how bad actors can leverage them to expand the scope and scale of cyberattacks. That speaks to one of the key reasons behind the Portfolio’s position in the First Trust Nasdaq Cybersecurity ETF (CIBR) shares.
6. President Trump has formally approved a landmark agreement with Saudi Arabia that will provide the country with a civilian nuclear program and potentially open the door to uranium enrichment in the kingdom’s territory, according to administration officials. The new deal, which would last 30 years, is estimated to be worth tens of billions of dollars. It is designed to give American companies a central role in developing Saudi Arabia’s nuclear infrastructure while shutting out other foreign competitors. (WSJ)
Generic drug manufacturers must move production to the US or face a 100% import duty from August 2028, President Donald Trump said, threatening the supply of low-cost medicines that millions of Americans rely on. The move is aimed at “reshoring” generic pharmaceutical production in the US, and companies that don’t build plants onshore will face levies that would then double, to 200%, in August 2029, Trump said in a social media post. (Bloomberg)
This first part of these two President Trump developments has us taking another look at nuclear and uranium ETFs for the Portfolio. The second one about the reshoring of generic drug manufacturing and prospective tariffs should give a boost to companies like Viatris (VTRS), Amneal Pharmaceuticals (AMRX) and ANI Pharmaceuticals (ANIP). However, out thinking is Trump is looking to replicate efforts by Samsung (SSNLF) and Taiwan Semiconductor (TSM) to build chip plants in the U.S.
Announcements to that effect would likely make any move in those domestic generic companies short-lived, and also help foster demand for U.S. equipment companies, like our own United Rentals (URI). Given Trump’s August 2028 deadline, more than likely the president is giving generic drug companies time to draw up plans and make those announcements.
7. Economic data today per TipRanks: MBA Mortgage Applications Index (Weekly), EIA Oil Stocks (Weekly)
8. Companies reporting today per TipRanks: AM – AT&T (T), Badger Meter (BMI), Cal-Maine Foods (CALM), GE Vernova (GEV), Otis Worldwide (OTIS), Philip Morris International (PM), PulteGroup (PHM), RPM (RPM), Wabtec (WAB). PM – Alphabet (GOOGL), Avalon Bay (ABV), Crown Castle (CCI), CSX (CSX), Graco (GGG), IBM (IBM), Las Vegas Sands (LVS), Packaging Corp. (PKG), ServiceNow (NOW), Tesla (TSLA), Texas Instruments (TXN), Waste Connections (WCN).
At the time of publication, TheStreet Pro Portfolio was long CIBR, GOOGL and NVDA.
