Concerns about slowing OpenAI growth interrupted a string of S&P 500 and Nasdaq records

The S&P 500 and Nasdaq Composite indices went into negative territory at the end of trading on April 28 - after two trading sessions completed at record highs. Investors were concerned when The Wall Street Journal sources reported that OpenAI failed to meet its own revenue and user growth targets. While OpenAI denied these suspicions, they affected stocks across the AI industry. In addition, oil prices rose again after the UAE decided to withdraw from OPEC.

- The S&P 500 broad market index fell 0.49% on April 28 after setting new records on Friday and Monday. On Tuesday, it ended trading at 7138.8 points.

- The Nasdaq Composite Technology Sector Index also broke its streak of record highs, falling 0.9 percent to 24,663.8 points on Tuesday.

- The blue-chip index Dow Jones Industrial Average lost an insignificant 0.05% for the day, ending trading at 49,141.93 points.

- The Russell 2000 index of small and mid-capitalization companies fell 1.15% to 2,756.05 points.

- Brent crude futures rose 2.6% to $111 a barrel, while WTI rose 3.6% to nearly $100 a barrel.

- Gold fell 1.8%, slipping below $4600 a troy ounce.

OpenAI's recent growth in revenue and new users has fallen short of the company's own targets, The Wall Street Journal reported. According to the Journal, OpenAI CFO Sarah Fryar told management that she was concerned about whether OpenAI would be able to pay for computing contracts in the future if revenue didn't grow fast enough. Shares of chip makers declined after the news was released, with the VanEck Semiconductor core ETF losing nearly 3%. Nvidia shares fell 1.6% and Broadcom shares fell 4.4%. Advanced Micro Devices and Intel lost 3.4% and 0.6%, respectively, while cloud giants Oracle and CoreWeave were down 4% and 5.8%, respectively.

The news about OpenAI came out on the eve of the publication of important corporate reports: the results on Wednesday, April 29, are to be presented by four technology giants from the "Magnificent Seven": Alphabet, Amazon, Meta Platforms and Microsoft. Apple will also reveal its quarterly results on Thursday.

Market growth was also held back by the lack of positive news on peace talks between the U.S. and Iran: they seem to have reached an impasse, CNBC notes. President Donald Trump said Iran has asked the U.S. to lift its naval blockade of the Strait of Hormuz while negotiations to end the two-month war are underway, Bloomberg writes. According to CNN, Pakistani mediators expect Tehran to submit a revised proposal to open this crucial trade route in the coming days.

The United Arab Emirates has announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC and OPEC+). For the past several years, the UAE has expressed discontent over OPEC's restrictions on oil production in the group's member countries, which have hindered exports. "This is a political decision, it was taken after a thorough analysis of [the UAE's] current and future policies regarding [oil] production levels," Emirati Energy Minister Suhail Mohamed Al Mazroui told Reuters. He added that the move is not expected to have a significant impact on markets due to the situation in the Strait of Hormuz. The Wall Street Journal writes that the UAE will gradually increase production after leaving the group. On Tuesday, the news led to an increase in the cost of futures on Brent and WTI.

- Tuesday's drop in tech stocks is "just partial profit taking out of caution ahead of what investors will hear tomorrow in reports" from most of the "Magnificent Seven" companies, Integrated Partners Chief Investment Officer Stephen Colano explained to CNBC.

- Any slip in forecasts for AI-related demand or capital expenditures could easily cause the market to rethink how far it has come over the past month, according to Montis Financial Chief Investment Officer Dennis Vollmer. "The most important question for investors is whether AI can continue to drag the market forward," Bloomberg quoted him as saying.

This article was AI-translated and verified by a human editor