A sell-off in technology giants dragged down stocks as concerns resurfaced over whether vast investments in artificial intelligence will pay off just as traders gear up for a slew of megacap results.
The industry that’s powered this month’s equity rally got hit on a news report that OpenAI failed to meet its own goals for new user acquisition and sales, fuelling internal concerns the firm may struggle to support its AI infrastructure spending. Partners such as Oracle Corp. and CoreWeave Inc. slumped, with the S&P 500 dropping from a record. The Nasdaq 100 lost about 1.5 per cent.
OpenAI missed several sales targets after rival Anthropic PBC gained ground in the coding and enterprise markets, the Wall Street Journal reported. Stocks remained lower even as the ChatGPT creator pushed back against those concerns, saying its consumer and enterprise businesses are “firing on all cylinders.”
That all came as big techs representing about a quarter of the S&P 500’s value get ready to release their earnings. Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. are set to report Wednesday, followed by Apple Inc. a day later.
Any misstep involving AI-related demand or capital budget expenditures could easily give the market second thoughts about how far it has run in the past month, according to Dennis Follmer at Montis Financial.
“The most important question for investors is whether the AI train can keep driving the market forward,” he said.
The silver lining is that tech earnings have been largely shielded from the disruptions of the Iran war. The sector’s results are expected to have grown 41 per cent in the first quarter, according to data compiled by Bloomberg Intelligence.
Elsewhere, Brent crude rose to around $111 amid concern of a protracted peace process that could keep the Strait of Hormuz shut for an indefinite period.
US President Donald Trump said Iran has asked the US to lift a naval blockade of Hormuz, while the two sides negotiate an end to the two-month war, which has upended global energy supplies. Mediators in Pakistan expect Iran will submit a revised proposal in the next few days, CNN reported on Tuesday.
Traders also parsed the latest economic data on the eve of the Federal Reserve decision, with officials expected to stay on hold. Consumer confidence unexpectedly rose as Americans grew more hopeful about the jobs outlook. Still, Treasuries fell as elevated energy prices fuelled worries about inflationary pressures.
Meantime, JPMorgan Chase & Co.’s Jamie Dimon again cautioned that a credit market downturn could be worse than expected, even after his firm and Wall Street rivals posted a banner quarter in which loan portfolios held up.
Corporate Highlights
- United Parcel Service Inc. left its financial guidance unchanged despite topping first-quarter sales and profit expectations, underscoring the uncertainty that remains for the courier’s plan to overhaul its delivery network.
- Coca-Cola Co.’s focus on smaller sizes is paying off with cash-strapped consumers as the world’s largest beverage maker boosted sales last quarter more than expected.
- General Motors Co. said the war in Iran is fuelling higher-than-expected costs, injecting some caution into the automaker’s outlook even as it raised its full-year profit forecast.
- JetBlue Airways Corp. is cutting flights, taking fewer new aircraft and passing costs onto passengers as the US airline joins other carriers in trying to muscle through a protracted fuel crisis.
- Spotify Technology SA sank after the music streaming leader gave a forecast for operating income in the second quarter that missed analysts’ estimates.
What Bloomberg strategists say...
“Stocks and bonds face pressures this week beyond rising oil prices. High hurdles on Mag 7 earnings expectations will keep a lid on equities, while bond yields may rise further as some traders bet on the 10-year hitting 4.40%.”
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.7% as of 1 p.m. New York time
- The Nasdaq 100 fell 1.3%
- The Dow Jones Industrial Average was little changed
- The MSCI World Index fell 0.6%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was little changed at $1.1710
- The British pound fell 0.1% to $1.3515
- The Japanese yen was little changed at 159.56 per dollar
Cryptocurrencies
- Bitcoin fell 1.1% to $76,111.92
- Ether fell 0.2% to $2,286.28
Bonds
- The yield on 10-year Treasuries advanced two basis points to 4.36%
- Germany’s 10-year yield advanced three basis points to 3.07%
- Britain’s 10-year yield advanced three basis points to 5.01%
Commodities
- West Texas Intermediate crude rose 3.1% to $99.31 a barrel
- Spot gold fell 1.9% to $4,592.28 an ounce
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Published on April 29, 2026