U.S. stocks traded mixed early Wednesday as investors balanced sharply lower oil prices against renewed enthusiasm for artificial-intelligence infrastructure and cybersecurity plays.
The Dow Jones Industrial Average rose 152.54 points, or 0.30%, while the Nasdaq Composite added 22.82 points, or 0.09%. The S&P 500 gained 4.02 points, or 0.05%, according to market data from the early session screenshots. Crude oil futures, however, plunged $5.15, or 5.49%, to $88.74 a barrel after an earlier spike tied to fears surrounding Middle East supply disruptions. The CBOE Volatility Index, or VIX, slipped 1.29% to 16.79, signaling calmer investor sentiment despite the continuing negotiations regarding the Iran war.
The primary driver behind Wednesday’s trading session was the sharp reversal in oil prices following recent panic buying linked to the closure of the Strait of Hormuz and escalating Iran tensions. Energy markets had rallied aggressively in recent sessions amid fears of supply disruptions, but traders appeared to rotate back into risk assets as crude prices cooled.
At the same time, investors continued piling into AI-linked software and cybersecurity names after a bullish research note from Wedbush raised price targets on Palo Alto Networks and CrowdStrike. Wedbush analysts Dan Ives and his team said artificial intelligence is becoming “the biggest growth catalyst for the cyber industry in the past 20 years,” adding that increasingly sophisticated AI-driven attacks are forcing enterprises to consolidate vendors and boost security spending.
Wedbush raised its price target on Palo Alto Networks to $300 from $225 and increased its CrowdStrike target to $700 from $550, citing accelerating enterprise AI adoption, stronger federal cybersecurity demand, and expanding platform integration opportunities. The firm described PANW and CRWD as “two of the clearest cyber AI winners in the cybersecurity space.”
Cybersecurity sentiment also benefited from weakness in rival Zscaler after the company’s AI and free-cash-flow outlook disappointed investors, according to reporting from AInvest. Investors appeared to rotate toward larger platform players viewed as better positioned to capitalize on AI-driven enterprise security spending.
Meanwhile, energy investors continued monitoring the economic fallout from higher gasoline prices heading into the summer driving season. Rob Thummel, senior portfolio manager at Tortoise Capital, noted that Americans typically drive between 900 billion and 950 billion miles between Memorial Day and Labor Day, accounting for roughly one-third of annual almost 3 trillion vehicle miles traveled. He added that Americans spend approximately $80 billion on gasoline during the summer driving season, while average unleaded gasoline prices are currently 43% higher than a year ago.
The latest gasoline data underscored lingering inflation concerns for consumers even as oil prices retreated Wednesday. Average U.S. unleaded gasoline prices during the summer driving season were shown near $4.49 per gallon in the latest chart provided, well above recent historical averages.
Investors will now look ahead to upcoming to earnings reports, after the bell, from Marvell Technology and Salesforce.