The S&P 500 and Nasdaq Composite fell on Tuesday, weighed down by a report that pointed to weakness in OpenAI as well as a rise in oil prices.
The broad market index fell 0.6%, while the tech-heavy Nasdaq shed 1.2%. The Dow Jones Industrial Average added 146 points, or 0.3%, lifted by a more than 5% gain in shares of Coca-Cola and a 1% rise in Sherwin-Williams shares after both companies reported better-than-expected earnings.
SOXL Fell 13%; Spotify Fell 12%; Corning Down 10%; CoreWeave Down 7%
OpenAI recently saw revenue and new users growth that were below its own targets, according to a Wall Street Journal report. The report added that CFO Sarah Friar told leadership she was concerned OpenAI may not be able to pay computing contracts in the future if its top line doesn’t expand fast enough.
The report sent tech lower. Nvidia lost more than 2%, while Broadcom pulled back more than 4%. AMD and Intel were down nearly 6% and 4%, respectively. Oracle dropped more than 7%.
Tuesday’s moves come after the S&P 500 and Nasdaq hit record highs on Monday. The market’s gains were kept in check as peace talks between the U.S. and Iran appeared to come to a standstill.
Over the weekend, President Donald Trump canceled plans to send U.S. special envoy Steve Witkoff and Jared Kushner to Pakistan to discuss the ceasefire in Iran. In a Truth Social post, the president said that negotiations could happen over the phone. Esmaeil Baqaei, Iran’s Foreign Ministry spokesperson, said that no meetings are currently planned between Tehran and Washington.
In a bit of positive news, White House press secretary Karoline Leavitt confirmed on Monday that Trump and his national security team have discussed Iran’s offer to reopen the Strait of Hormuz if the war ends and the U.S. lifts its blockade.
To be sure, crude prices were higher again on Tuesday. West Texas Intermediate futures jumped 5% to trade above $101 per barrel. Brent futures gained 3% to above $112 per barrel.
The news comes during a major earnings week for the stock market, with five of the “Magnificent Seven” tech titans slated to report. Alphabet, Amazon, Meta Platforms and Microsoft are due Wednesday, while Apple’s results are set for Thursday.
“I do think some strength in the first quarter has been pre-traded,” said John Belton, growth equities portfolio manager at Gabelli Funds on CNBC’s “Closing Bell: Overtime” on Monday afternoon. “But these are strong fundamentals, high expectations — hard to say how stocks respond on day of earnings against that setup. Still, looking longer term, I think these are pretty interesting.”