Dow climbs to record 54,349 as earnings power blue-chip rally

The Dow rose 0.5% to a record 54,349 on Wednesday as strong earnings from Amgen, Disney and Merck powered the blue-chip index higher.

"The economy is being fueled by this phenomenon," said Stephanie Link, chief investment strategist at Hightower Advisors. "It's not just the hyperscalers spending $800 billion this year on AI, but it's the companies that are benefiting from that spend."

The 263-point gain marked the Dow's 24th record of 2026 and a 5.3% advance over five straight sessions — the index's best run since the April 2025 tariff panic. The Nasdaq composite fell 0.8% as Alphabet dropped 4% on executive departures. Nvidia rose 3.4% after Elon Musk said SpaceX would build exclusively on Nvidia chips, while SpaceX shares fell 14% and AMD dropped 7% after the announcement.

The divergence shows earnings are underpinning the rally even as tech faces volatility. Nvidia reports earnings Aug. 26, while SpaceX's lockup expiration on Aug. 6 could add pressure to the newly public company's shares.

Tech Diverges as SpaceX Goes All-In on Nvidia

Musk said on SpaceX's first earnings call as a public company that the firm would build exclusively on Nvidia's Vera Rubin architecture, calling it "the best AI computer." The commitment covers both terrestrial data centers and the planned Starmind AI-1 orbital computing satellites, which will feature Nvidia's Rubin GPUs and Vera CPUs. Musk told Morgan Stanley's Adam Jonas that SpaceX expects "a very significant percent" of Nvidia's GPUs next year, and that the company plans to end 2026 with more than 2 gigawatts of compute capacity, rising to nearly 10 gigawatts by the end of 2027.

SpaceX reported Q2 revenue of $7.81 billion, up 92% year over year and above the $6.82 billion consensus, while its net loss narrowed to $541 million from $1 billion a year earlier. But AI capital expenditures ballooned to $15.8 billion — more than double the $7.7 billion spent in Q1 — bringing total capex to $18.37 billion. The AI segment booked a $1.26 billion operating loss, while Starlink remained the only profitable division with $1.66 billion in operating income on $4.29 billion in revenue. Musk projected a $100 billion annualized revenue run rate by December 2026 and pulled forward the company's $1 trillion annual revenue target from 2031 to 2030.

AMD, SpaceX's previous chip supplier, fell 7% despite record sales, as the exclusive Nvidia deal undercut AMD's push to position its Instinct MI450 as a hyperscaler alternative. Nvidia, which trades at 36 times trailing earnings, extended gains to a fifth consecutive session. Foxconn, Nvidia's primary manufacturing partner, reported a 54.2% year-over-year increase in monthly sales, reflecting continued strength across the AI supply chain.

Eli Lilly rose 4.9% after beating GLP-1 sales growth estimates, while Disney gained 3.6% on "Toy Story 5" box office performance and theme park revenue growth. Industrial giant 3M posted gains alongside financial companies JPMorgan Chase and Goldman Sachs.

Gold, Copper Rally as Oil Stays Mixed

Gold gained $150.40 an ounce, or 3.7%, settling above $4,300 and above its 50-day moving average for the first time since March. Copper's front-month futures contract ended at $6.703 a pound, a record, driven by high AI demand and dwindling supply from a mining outage and tariffs on copper products. Oil prices finished mixed, with Brent rising slightly and U.S. crude futures slipping, as Middle East mediators worked on a temporary fix for the Strait of Hormuz. Signs of de-escalation with Iran have helped extend the rally in recent sessions, with retreating oil prices relieving inflationary pressures.

The market's resilience comes as investors weigh the durability of the AI build-out against rising commodity prices and geopolitical tensions. With the Dow up 5.3% in five sessions and 24 records this year, the question is whether earnings can continue to outpace concerns about AI spending and inflation. The divergence between blue-chip industrials and tech names suggests investors are rotating toward companies with proven cash flows, even as the AI infrastructure build-out continues to reshape the market's leadership.

This article is for informational purposes only and does not constitute investment advice.