Semiconductor shares, which have surged over 40 percent so far this year, weighed particularly heavily on the Nasdaq, which suffered its biggest daily percentage loss in a month.
OpenAI missed internal targets for weekly users and revenue, raising concerns over the AI heavyweight’s ability to support its massive spending on data centres, according to a report from the Wall Street Journal.
Shares of Oracle, whose reliance on OpenAI for its cloud computing ambitions has been under scrutiny, fell 4.1 percent.
Chip stocks also dropped, with Nvidia, AMD and Broadcom down between 1.6 percent and 4.4 percent. Nvidia-backed CoreWeave slid 5.8 percent.
“(OpenAI) is giving investors more food for thought, whether the growth is slowing and what that means for capex spending,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
“You’ve got major hyperscalers coming out with results tomorrow, which probably gives investors even more reason to take a few chips off the table.”
First-quarter earnings season shifts into overdrive this week, with five of the companies in the Magnificent Seven group of AI-related megacap firms expected to post results.
On Wednesday, Alphabet, Amazon, Meta Platforms and Microsoft are slated to report, with Apple on deck for Thursday.
The companies expected to report this week account for about 44 percent of the S&P 500’s total market capitalisation, according to Raymond James.
General Motors advanced 1.3 percent after the automaker beat quarterly profit estimates and lifted its full-year earnings forecast, boosted by a resilient US car market and an expected tariff refund.
United Parcel Service shares dropped 4.0 percent after the package delivery company reiterated its full-year revenue target as spiking fuel costs offset underlying business improvement.
Coca-Cola rose 3.9 percent following its better-than-expected quarterly report. The beverage giant played down the impact of high oil prices and raised its annual earnings target.
The Nasdaq fell 0.9 percent, to 24,663, the Dow finished marginally lower at 49,141, while the S&P 500 fell 0.5 percent, to 7,138.
Of the 11 major sectors in the S&P 500, tech shares were down the most, while energy enjoyed the biggest percentage gain.
The US Federal Reserve has convened for what is likely to be Jerome Powell’s last monetary policy meeting as chair of the central bank.
While the Fed is likely to leave its key interest rate unchanged on Wednesday, the accompanying statement and Powell’s subsequent press conference will be parsed for policymakers’ views on inflation risk related to the war-related energy price spike.
In another blow to oil-exporting countries, the United Arab Emirates announced on Tuesday it was withdrawing from Opec.
Crude prices spiked, reviving inflation worries and contributing to risk-off sentiment. (Reuters)
