SpaceX shares jump as merger talks with Tesla drive market gains

US benchmark equity indexes rose intraday Wednesday as traders assessed SpaceX (SPCX) financial results and the prospect of a merger with Tesla (TSLA). The Nasdaq Composite climbed 1.3% to 26,756, while the S&P 500 gained 0.7% to 7,764.6 and the Dow Jones Industrial Average advanced 0.4% to 52,722.8.

SpaceX shares surged 8.3% after the satellite and rocket company reported a swing to third-quarter earnings year on year. Revenue exceeded Wall Street expectations, driven by sharp increases in its artificial intelligence and connectivity divisions. Elon Musk, who heads both companies, said late Tuesday that SpaceX and Tesla have formed special committees to evaluate a potential merger. Saxo Bank noted in a Wednesday report that such a deal could allow the firms to share technology, reduce overlapping costs, and accelerate development. The brokerage estimated the combined market value of the two companies at approximately $3.5 trillion. Tesla shares rose 3.6% intraday ahead of its quarterly earnings report scheduled for after the closing bell Wednesday.

Technology stocks led sector gains, while communication services recorded the steepest decline. Super Micro Computer (SMCI) was the top gainer on the S&P 500, jumping 10% following an upbeat preliminary fiscal first-quarter revenue report issued late Tuesday. In contrast, AT&T (T) was the worst performer on the index, falling 6%. The telecommunications company raised its full-year earnings outlook based on stronger-than-expected third-quarter results, although postpaid phone subscriber growth missed projections. Netflix (NFLX) shares dropped 4.4% after the streaming company provided a downbeat fourth-quarter outlook late Tuesday.

Treasury yields remained largely stable intraday, with the two-year rate at 4.79% and the 10-year rate at 5.11%. West Texas Intermediate crude oil declined 1.3% to $96.58 a barrel, while Brent crude edged down 0.3% to $108.50. According to CNBC, Iran's Islamic Revolutionary Guard Corps stated on Tuesday that naval mines prevented three tankers from navigating the Strait of Hormuz on unauthorized routes. Spot gold increased 0.2% to $4,131.84 per troy ounce, while silver decreased 0.5% to $57.71 per ounce.