Midday: US stocks mixed; Google drives Nasdaq and S&P indexes higher

In the early morning of September 4, East 8th District time, U.S. stocks were mixed at midday on Wednesday, with the Nasdaq and S&P 500 indexes climbing. The fact that Alphabet, Google's parent company, avoided being split up has boosted market optimism that tech giants can withstand regulatory threats.

The Dow Jones fell 185.67 points, or 0.41%, to 45,110.14 points; the Nasdaq rose 173.65 points, or 0.82%, to 21,453.28 points; the S&P 500 index rose 17.28 points, or 0.27%, to 6,432.82 points.

Tech stocks broadly rose, pushing the Nasdaq and S&P 500 indexes higher. Energy and banking stocks underperformed due to ongoing concerns about economic slowdown and surging bond yields.

Alphabet (Google's parent company) shares surged 7.9% to a record high after a U.S. federal judge ruled on Tuesday that Google could keep its Chrome browser but must not sign exclusive search agreements and must share its search data. The ruling spared the tech giant from the worst-case scenario, with the rationale mainly based on the idea that artificial intelligence provides consumers with more choices.

The ruling also means that Apple can continue to pre-install Google Search on iPhones, which is a highly profitable arrangement for Apple. The company, which is also facing antitrust lawsuits, saw its stock price rise as well.

U.S. stocks had a poor start to September trading, with the stock market losing upward momentum during Tuesday's session. As investors took profits from the summer rally, all three major U.S. indexes closed lower on Tuesday.

On Tuesday, U.S. bond yields also soared as traders weighed the consequences of a federal appeals court ruling on Friday that declared several of Trump's global tariffs illegal. The ruling could force the U.S. government to refund billions of dollars in revenue collected from tariffs.

The sell-off in U.S. Treasuries also eased somewhat on Wednesday. The 30-year Treasury yield retreated after approaching 5%. UK gilts and eurozone bonds edged higher. Earlier, Japan's 20-year government bond yield hit its highest level since 1999.

Deutsche Bank CEO Christian Sewing said he expects bond yields to remain high in the coming months, as governments around the world strive to implement reforms and adhere to fiscal discipline.

Sewing said: "I don't think this is just a temporary fluctuation. To some extent, it reflects political uncertainty, a lack of reforms, and continuously rising debt."

The current turmoil in the global bond market is due to a combination of factors. The global government bond market is under selling pressure as concerns about inflation, debt issuance, and fiscal discipline have eroded confidence in what were previously considered the world's safest assets.

September is typically a weak month for U.S. stocks. Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, noted that since 1950, September has been the worst-performing month for the S&P 500 index, with an average return of -0.7%.

Scott Wren said: "Stocks will temporarily move away from the recent calm period as we enter September. Market volatility should increase, especially for stocks and short-/long-term fixed income assets, while the economic slowdown, phased tariff impacts, and ongoing political uncertainty continue to play out."

Investors are closely watching the August employment report to be released on Friday, viewing it as the next major test for U.S. stocks.

Focus Stocks

Google avoids being split up. A judge at the U.S. District Court in Washington ruled that Google will face restrictions in the U.S. search market antitrust case but will not be subject to the forced breakup sought by the Department of Justice. Google is prohibited from signing exclusive agreements with device and browser manufacturers but can still pay partners to maintain product distribution.

Apple shares rose after the court ruled that Google could continue to pay Apple and other partners for default search engine placement.

Macy's raised its annual performance guidance.

Tesla Model Y L has begun deliveries, earlier than expected.

Himax Technologies launched the HX8882-F13 Tcon, targeting the automotive display market.

Zeekr Group's sales have exceeded 40,000 units for six consecutive months.

GDS Holdings was rated favorably by Goldman Sachs, which also raised its target price.