(Updates with final closing prices, volume data)

* Indexes down: Dow 0.01%, S&P 500 0.14%, Nasdaq down 0.57%

* Chip index rises modestly while software index sinks

* AT&T ( T ) jumps after strong wireless subscriber additions in

Q2

* Alphabet, Tesla, Texas Instruments ( TXN ) report results after

the bell

By Sinéad Carew and Ragini Mathur

July 22 (Reuters) - The Nasdaq led Wall Street lower on

Wednesday with a mixed performance from technology stocks, as

investors waited for key earnings reports to gauge the health of

a market rally fed by enthusiasm for artificial intelligence.

The S&P 500 fell slightly and the Dow ended virtually unchanged

as traders also monitored the latest Middle East hostilities,

which led oil futures to settle at a six-week high, fanning

inflation worries.

After months of gains that lifted the major indexes from

their March lows, momentum has been wobbling with uneven trading

in heavyweight semiconductor stocks and weakness in software

companies.

The Philadelphia SE Semiconductor index ended up 0.4%,

recovering from early losses for its third straight session of

gains after three days of losses that had confirmed it was in a

bear market late last week.

Second-quarter results were due after the bell from Alphabet

and Tesla, the first of the so-called

"Magnificent Seven" megacap companies to report. Investors were

hoping for fresh evidence that these companies'

multibillion-dollar investments in AI are paying off.

"Investors have become a lot more discerning and specific as to

where they're choosing to invest in the AI trade," said Kevin

Gordon, head of macro research and strategy at Charles Schwab ( SCHW ),

noting the stark difference in performance between software and

chip stocks on the day.

The Dow Jones Industrial Average fell 6.06 points, or

0.01%, to 52,218.58, the S&P 500 lost 10.24 points, or

0.14%, to 7,498.96 and the Nasdaq Composite lost 146.30

points, or 0.57%, to 25,690.90.

Trading was choppy in Alphabet, which closed down 1.5%. It will

be under scrutiny after a delay in the launch of a model central

to its AI ambitions. Texas Instruments ( TXN ) lost ground in

extended trading after finishing the regular session up 1%

before it issued its results and forecast current quarter

revenue above expectations.

After closing the regular session down 1.3%, Tesla added to

losses in late trade, falling 3% after it reported negative free

cash flow in the second quarter for the first time in more than

two years.

The crowded earnings calendar leaves markets vulnerable to

sharper swings this week, while geopolitical tensions added

another layer of caution.

Crude oil futures recorded their highest settlement since June

11, up around 3% on the day as Yemen's Iran-backed Houthi

militia threatened shipping in the Red Sea, one of the world's

most important energy chokepoints along with the Strait of

Hormuz.

U.S. President Donald Trump vowed on Wednesday to destroy an

Iranian bridge or power plant every time Iran shoots at a ship

in the strait.

"Excluding the megacap AI trade, there's an element of

what's going on with oil that's driving the market," said

Schwab's Gordon, noting that high oil prices are fanning

inflation worries. "People are being defensive with utilities,

but with energy and materials being higher, that's the inflation

component."

The Federal Reserve is expected to keep interest rates steady

for the rest of 2026, according to the median forecast in a

Reuters poll of economists. Still, respondents said the risk of

a rate hike remained elevated.

Traders are pricing in a roughly 66% chance the Fed leaves rates

unchanged at next week's meeting, CME Group's FedWatch tool

showed.

Shares in Super Micro Computer ( SMCI ) rallied 19.8%, making it

the S&P 500's biggest percentage gainer on the day, after the

server maker said it had secured more than $60 billion in new

orders in the fourth quarter. Among its peers, Dell Technologies ( DELL )

finished up 9.3% while Hewlett Packard Enterprise ( HPE )

added 3% after Super Micro reported upbeat preliminary

results.

Among other movers, AT&T ( T ) advanced 3.5% after the telecom

firm added more wireless subscribers than expected in the second

quarter. Philip Morris International ( PM ) shares rose 3.3%

after stronger cigarette demand helped the company beat

quarterly results estimates.

Declining issues outnumbered advancers by a 1.26-to-1 ratio on

the NYSE where there were 142 new highs and 161 new lows. On the

Nasdaq, 1,665 stocks rose and 3,103 fell as declining issues

outnumbered advancers by a 1.86-to-1 ratio.

The S&P 500 posted 14 new 52-week highs and 2 new lows while

the Nasdaq Composite recorded 45 new highs and 104 new lows.

On U.S. exchanges, trading volume was relatively light with

15.16 billion shares changing hands compared with the 19.05

billion moving average for the last 20 sessions.