Wall Street processed a busy session on Wednesday, with investors reacting to a major leadership overhaul at Alphabet, a sharp selloff in SpaceX despite a strong earnings report, and notable moves in commodity markets.
Alphabet's AI leadership shakeup and researcher exits
Alphabet shares fell approximately 4% after the Google parent announced a sweeping restructuring of its artificial intelligence division, alongside the departure of several prominent AI researchers. The changes come as Google DeepMind faces scrutiny over delays to its flagship Gemini model, which remains unreleased despite an expected June launch. This has intensified investor concerns that Google is losing ground to rivals like Anthropic and OpenAI in the AI race.
As part of the reorganization, Demis Hassabis, CEO of Google DeepMind, will become Alphabet's chief scientist while also serving as chairman of Google DeepMind. Koray Kavukcuoglu, currently the unit's CTO, will take over day-to-day management as senior vice president while retaining his role as Alphabet's chief AI architect.
Meanwhile, Jeff Dean, Sanjay Ghemawat, Oriol Vinyals, and Quoc Le have left Alphabet to launch Discovery Loop, a public benefit corporation focused on machine learning, scientific research, and engineering. The startup plans to build software that automates scientific experimentation, initially targeting machine learning before expanding into hardware engineering, clean energy, and drug discovery. Discovery Loop has secured investment from Google and entered a cloud computing partnership with Google Cloud.
These departures add to a broader talent shift across the AI industry, with former Google researchers like Noam Shazeer and John Jumper recently joining OpenAI and Anthropic, respectively. The moves highlight the intensifying competition for top AI talent and the strategic importance of retaining key personnel.
SpaceX stock slides despite earnings beat
SpaceX shares dropped 12% as investors looked past stronger-than-expected second-quarter results and focused on the company's accelerating AI spending. The aerospace company reported a loss of 9 cents per share, better than the expected 26-cent loss, and revenue of $7.81 billion, topping the consensus estimate of $6.93 billion.
However, capital expenditures surged sixfold to $18.4 billion in the quarter, with most of the investment directed toward AI initiatives. AI spending exceeded $23 billion in the first half of the year, compared with $3.3 billion in the same period last year. Revenue continued to be supported by growth in the Starlink satellite internet business, the company's only profitable operating segment.
Investors are also preparing for the expiration of SpaceX's post-IPO lock-up period on Thursday, when up to 911.5 million shares could become eligible for sale, substantially increasing the public float. The decline followed a sharp rally earlier this week that had added more than $250 billion to SpaceX's market value.
Gold rallies to seven-week high
Gold prices climbed to their highest level in almost seven weeks, buoyed by lower Treasury yields and a weaker US dollar. Spot gold rose 4.24% to $4,248.90 an ounce after touching $4,264.93, its highest level since June 18. US gold futures settled 3.8% higher at $4,314.20 per ounce.
The rally came as optimism surrounding negotiations involving Iran reduced expectations of near-term interest rate hikes, while the dollar traded near six-week lows, making gold more attractive for overseas buyers. Despite Wednesday's rebound, gold remains about 24% below its January record high and is down roughly 19% since the start of the Iran conflict. Silver advanced 4.4%, while platinum and palladium also posted gains as hopes for easing geopolitical tensions supported the broader precious metals complex.
Oil prices ease on renewed Iran diplomacy hopes
Oil prices edged lower as investors weighed renewed signs of diplomatic progress surrounding the Strait of Hormuz against persistent risks to global shipping. Brent crude was up 0.13% to $79.46 a barrel, while West Texas Intermediate crude declined 0.82% to $75.14.
President Donald Trump said the United States held an "all-day negotiation" with Iran, describing the discussions positively while warning that military action remained possible if an agreement could not be reached. Iran denied that formal peace talks were taking place but said it had reached an understanding with Oman on managing the Strait of Hormuz, with a joint announcement being prepared.
Crude prices also came under pressure after US government data showed crude inventories unexpectedly rose by 2.5 million barrels last week, compared with expectations for a 1.5 million-barrel draw.
This article is for informational purposes only and does not constitute financial advice.
