Nasdaq leads Wall Street lower as chip stocks tumble, oil rises Proactive uses images sourced from Shutterstock 4:15pm: Stocks close lower
Wall Street lost momentum on Tuesday, with the Dow, S&P 500 and Nasdaq all closing lower as weakness in chip stocks weighed heavily on sentiment, while oil prices pushed higher and kept energy names in focus.
The Nasdaq led the declines, falling 0.9% to 24,664 as technology shares came under pressure following reports tied to OpenAI that rattled investor confidence across the semiconductor space. The S&P 500 slipped 0.5% to 7,139, while the Dow Jones Industrial Average edged 0.1% lower to 49,142.
Attention now shifts to a fresh round of corporate earnings after Tuesday’s closing bell, with results from Visa, T-Mobile and Starbucks expected to provide the next test for investor sentiment.
3:40pm: Proactive news headlines
Poolbeg Pharma PLC (AIM:POLB, OTC:POLBF, FRA:POLBF) is entering a pivotal phase as it advances interim data for its lead candidate POLB 001, an oral preventative treatment for cytokine release syndrome in cancer patients undergoing CAR T-cell and bispecific antibody therapies.
MustGrow Biologics Corp. (TSX-V:MGRO, OTCQB:MGROF, FRA:0C0) received Georgia approval for its TerraSante organic biofertility product, expanding the commercial footprint of its mustard-based agricultural solution across the southeastern United States.
M2i Global Inc (OTC:MTWO) moved closer to completing its merger with Volato Group after its super voting preferred shareholder approved the transaction, which will see Volato renamed M2i Global upon closing.
Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF, FRA:A6Y0) secured a final arbitration ruling confirming its expanded working interest in Brazil’s Caburé natural gas field, ending a multi-year dispute with its joint venture partner.
Immunic Inc (NASDAQ:IMUX, FRA:10VA) appointed veteran neurologist Michael A. Panzara as Chief Medical Officer to lead clinical and regulatory efforts ahead of a key multiple sclerosis milestone for its lead therapy vidofludimus calcium.
Premier African Minerals Ltd (AIM:PREM, OTC:PRMMF) raised £1 million through a discounted share placing to help complete commissioning of its Zulu Lithium and Tantalum Project processing plant in Zimbabwe.
2:55pm: Market movers
Rambus Inc shares tumbled after the chip IP company missed first-quarter revenue expectations and faced added pressure from an analyst downgrade tied to concerns over tightening DRAM supply.
MustGrow Biologics Corp. (TSX-V:MGRO, OTCQB:MGROF, FRA:0C0) received Georgia approval for its TerraSante organic biofertility product, expanding the reach of its mustard-based agricultural solution across the southeastern United States.
United Parcel Service Inc (NYSE:UPS) shares slipped despite better-than-expected first-quarter revenue and adjusted earnings, as ongoing weakness in its U.S. package delivery business weighed on investor sentiment.
Spotify Technology SA (NYSE:SPOT) shares dropped sharply even after beating first-quarter expectations on revenue, profit, and user growth, as investors focused on softer second-quarter profitability and subscriber guidance.
General Motors Company (NYSE:GM) shares fell despite strong first-quarter earnings and a higher full-year profit outlook, as investors weighed broader market concerns beyond the automaker’s earnings beat.
The Coca-Cola Company (NYSE:KO) shares rose after the beverage giant topped first-quarter earnings estimates and lifted its full-year profit forecast, supported by strong sales growth and steady demand for its flagship brands.
2:00pm: UAE leaves OPEC
News that the UAE is leaving Opec has roiled the commodity space.
Kathleen Brooks, research director at XTB, called the news “a major blow to Opec, which has held a tight fist on global oil supply for decades.”
“However, the fact that a member as important as the UAE is happy to walk away is a sign that 1, the oil market is changing post the war in Iran, and 2, Saudi Arabia will have less control over amoothing the supply of oil in the future, which could make the commodity space more volatile in the future,” Brooks wrote.
So far the impact on the oil prices has been “minimal,” according to Brooks.
12:55pm: OpenAI has ‘little incentive to spend’
As mentioned earlier, the Wall Street Journal reported that OpenAI fell short of a goal to reach one billion weekly active users by the end of 2025 and missed revenue targets for ChatGPT.
Wedbush argues that OpenAI has little incentive to spend conservatively and that real-world compute constraints undercut the overspending narrative.
As evidence, they point to GPU instance prices rising due to tight availability, citing examples like Krea paying 30% more for compute and Collide potentially building its own infrastructure. “Net, we believe infrastructure demand remains robust (in-line with various earnings reports including CLS’s guidance raise yesterday) driven in large part by AI usage growth, creating a broad based demand driver for semiconductor and component vendors,” analysts wrote.
12:00pm: Fed expected to hold steady
The Federal Reserve begins its two-day policy meeting today and is widely expected to hold interest rates steady. Market expectations have shifted further out, with rate cuts now not anticipated until December.
While some policymakers, including Kevin Warsh, have expressed support for earlier rate reductions—a stance that would align with White House preferences—recent data is complicating that outlook, according to Ipek Ozkardeskaya, senior analyst at Swissquote.
As a result, inflation expectations have risen over the past two months, largely driven by higher energy prices, reinforcing a more cautious stance from the Fed.
“At this stage, no one — including central bankers — can predict what comes next if Middle East tensions continue to disrupt energy flows,” Ozkardeskaya said.
“What we do know is that the longer the Strait of Hormuz remains under strain, the stronger the impact on markets will be. Oil prices are currently trading roughly 50% above pre-conflict levels, and that is changing the way investors perceive risk.”
10:55am: OpenAI growth doubts
Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), Oracle Corp (NYSE:ORCL) and much of the semiconductor sector came under pressure after concerns over OpenAI’s growth cast doubt on demand for AI infrastructure.
Shares in Nvidia fell 3.3%, Broadcom Inc (NASDAQ:AVGO) dropped 4.2%, AMD (NASDAQ:AMD) declined 5.5% and Arm Holdings PLC (NASDAQ:ARM) plunged 7.4% following a report that OpenAI missed internal targets for both revenue and user growth.
According to the Wall Street Journal, the company behind ChatGPT fell short of a goal to reach one billion weekly active users by the end of 2025 and missed revenue targets for ChatGPT.
The report also said chief financial officer Sarah Friar had warned internally about the company’s ability to fund future computing commitments.
Shares in Oracle, which has a partnership with OpenAI, fell 7.4% in premarket trading, reflecting concerns over demand for data centre capacity.
Microsoft Corp (NASDAQ:MSFT), a major investor, slipped 1.45% after confirming changes to its agreement, removing exclusivity and revenue sharing.
10am: AI stocks lead Wall St retreat
It’s been a mixed start on Wall Street.
The Nasdaq slid 0.8% and the S&P 0.5%, both retreating from yesterday’s record highs.
The Dow Jones, after initially gaining 0.2%, has slipped back to flat.
Fallers on the Nasdaq 100 are led by ARM Holdings, down almost 6%, with Applied Materials, Broadcom, AMD, KLA-Tencor, Lam Research and ASML, all down over 3%; Intel, Marvell and NVIDIA, Qualcomm and Western Digital are all off more than 2%.
Leading the Dow higher are Coca-Cola, Salesforce.com, and Johnson & Johnson.
8.15am: Nasdaq to retreat from record high
US stocks looked set for an uneven start on Tuesday, as oil prices surged and the Federal Reserve began its two-day policy meeting.
Futures for the Nasdaq and S&P were down 1.3% and 0.7%, while Dow Jones futures were up 0.2%.
This would more than reverse the modest gains made on Wall Street the previous session, when the S&P and Nasdaq inched up 0.1% and 0.2% to fresh record closing highs, thanks to strength from Nvidia and other big tech, while the Dow Jones dropped 0.1%.
Oil prices during European trading on Tuesday hit a two-week high, with WTI crude up 3.2% to $99.50 a barrel.
Analysts said this reflected the ongoing closure of the Strait of Hormuz and the impasse between the US and Iran.
President Trump and his national security team were reported to be reviewing the proposal put forward by Iran to reopen the Strait and bring the war to an end.
“Right now, the market is not optimistic about the chance of a deal to reopen the Strait due to Iran’s request to push discussions about nuclear disarmament into the future,” said market analyst Kathleen Brooks at XTB.
“However, this is a news driven market and the oil price will be sensitive to geopolitical headlines this week.”
Tech stocks are also in focus today, she added, after a record run for semiconductor names and historic highs on Wall Street.
OpenAI CFO Sarah Friar, according to the WSJ article, told other executives that “she is worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough”.
Shares in Nvidia, Broadcom, AMD and semiconductor and tech giants are coming under pressure after a report from the Wall Street Journal reported that OpenAI missed sales targets and user acquisition goals.
Shares in Oracle, which has a tie-up with OpenAI, are down over 7% premarket.
Microsoft is down around 1.5% after it announced a change to its partnership with OpenAI on Monday, where the Redmond company’s license with OpenAI will no longer be exclusive, with no revenue-sharing element.
“OpenAI is the poster child for AI and its capabilities and ambitions. Its touted IPO is expected to raise close to a $1 trillion, but if it is struggling with sales then it could limit its spending on data centres, which would be a blow to the speed of AI uptake,” said Brooks.
“This news may threaten the AI investment theme that has driven US stock markets to record highs.”
This comes ahead of some key earnings releases this week with five of the ‘Magnificent 7’ reporting, four of whom have been massive hyperscalers committing hundreds of billions of dollars to AI investment per year.
Today’s earnings include Visa, Coca-Cola, Novartis, T-Mobile US, Corning, Welltower, Booking Holdings, S&P Global and Seagate Technology.