The S&P 500 fell on Tuesday, weighed down by a report that pointed to weakness in OpenAI, as well as rising oil prices.
The broad market index fell 0.49% to close at 7,138.80, while the technology-advanced Nasdaq Composite lost 0.9% to end at 24,663.80. The Dow Jones Industrial Average fell by 25.86 points, or 0.05%, and ended at 49,141.93. Losses in the blue-chip stock index were controlled by a nearly 4% rise in Coca-Cola shares after the company posted better-than-expected earnings.
OpenAI recently saw growth in revenue and new users that fell short of its own goals, according to a Wall Street Journal report. The report added that CFO Sarah Friar told management she was concerned that OpenAI might not be able to pay for computing contracts in the future if its revenue didn’t expand quickly enough.
Chip stocks fell after the report, with the VanEck Semiconductor ETF ( SMH ) slipping about 3%. Nvidia lost more than 1%, while Broadcom retreated more than 4%. Advanced Micro Devices fell more than 3%, while Oracle fell about 4%.
There is “just some cautious profit-taking ahead of what they’re going to hear from the earnings report tomorrow” from most of the Magnificent Seven firms, said Stephen Kolano, CIO of Integrated Partners.
Important stock market earnings reports are due this week, with five “Magnificent Seven” tech titans set to report results. Alphabet, Amazon, Meta Platforms and Microsoft should be announced on Wednesday, while Apple’s results are scheduled for Thursday, SEEbiz reports.
Tuesday’s moves come after the S&P 500 and Nasdaq hit record highs on Monday. However, market gains were kept in check as peace talks between the US and Iran appeared stalled.
Over the weekend, President Donald Trump canceled plans to send US special envoy Steve Witkoff and Jared Kushner to Pakistan to discuss a ceasefire in Iran. In a post on Truth Social, the president said the talks could be held over the phone. Esmaeil Baqaei, a spokesman for Iran’s Foreign Ministry, said that no meetings between Tehran and Washington are currently planned.
In a bit of positive news, White House spokeswoman Caroline Leavitt confirmed Monday that Trump and his national security team discussed an Iranian offer to reopen the Strait of Hormuz if the war ends and the U.S. lifts the blockade.
