Dow rises 110 points as Nasdaq slides on AI fears, oil surge weighs
US stocks opened lower on Tuesday, led by weakness in technology shares, as investors reassessed whether the artificial intelligence boom can sustain its momentum.
The tech-heavy Nasdaq Composite fell more than 1.15%, while the S&P 500 dropped around 0.54%.
In contrast, the Dow Jones Industrial Average edged higher by 110 points or 0.23%, supported by gains in select non-tech names.
Investor sentiment was shaken after a report by The Wall Street Journal indicated that OpenAI had missed internal targets for weekly users and revenue.
The report also noted concerns from CFO Sarah Friar about the company’s ability to meet computing contract obligations if revenue growth does not accelerate.
Although OpenAI is privately held, its performance is closely watched by investors due to its influence on the broader AI ecosystem and its ties to major listed technology companies.
Chipmakers, AI-linked stocks retreat
The report triggered declines across AI-linked and semiconductor stocks in premarket trading.
Shares of Oracle fell sharply, reflecting scrutiny over its reliance on OpenAI for cloud computing growth.
Chipmakers also came under pressure. Nvidia dropped more than 2.9%, while Advanced Micro Devices and Arm Holdings declined 4% and 7%, respectively.
Broadcom and Intel also posted losses.
The weakness comes after a strong rally that pushed the S&P 500 and Nasdaq to record highs earlier in the week, fueled by optimism around AI-driven growth.
Outside of technology, individual stock moves were mixed.
Shares of United Parcel Service fell after reporting a sharp drop in quarterly adjusted profit.
Meanwhile, Coca-Cola rose after lifting its annual profit outlook.
Spotify declined after forecasting second-quarter profit below expectations.
Oil surge, geopolitical tensions add pressure
Beyond tech-specific concerns, broader market sentiment was weighed down by rising geopolitical risks and surging oil prices.
The ongoing tensions involving the United States and Iran remain a key overhang, with negotiations appearing to stall.
A US official said President Donald Trump was dissatisfied with Iran’s latest proposal, dampening hopes for a near-term resolution.
Oil prices have surged amid continued disruption to the Strait of Hormuz, a key global shipping route.
Brent crude futures climbed above $111 per barrel, while West Texas Intermediate rose above $100 per barrel. Prices are now roughly 54% higher than pre-war levels.
Political developments have further complicated the outlook. Over the weekend, Trump canceled plans to send envoys to Pakistan for ceasefire talks, suggesting negotiations could continue remotely.
Iranian officials also indicated no meetings are currently scheduled between Tehran and Washington.
Earnings in focus amid high expectations
The market moves come during a critical week for corporate earnings, particularly among large-cap technology companies.
Five of the so-called “Magnificent Seven” firms are set to report results, including Alphabet, Amazon, Meta Platforms, Microsoft, and Apple.
With elevated valuations and high expectations, investors remain focused on whether earnings can justify the recent rally, particularly as macroeconomic and geopolitical uncertainties persist.
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