Wall Street experienced a tech-driven selloff following reports that ChatGPT creator OpenAI has struggled to meet revenue and user growth targets ahead of its anticipated public offering.
The Dow Jones Industrial Average slipped 25.86 points (0.05%) to close at 49,141.93. The S&P 500 dropped 35.11 points (0.49%) to 7,138.80, while the Nasdaq Composite fell 223.30 points (0.90%) to 24,663.80.
Among major technology stocks, Nvidia declined 1.59%, Amazon fell 0.54%, Alphabet dropped 0.16%, Broadcom tumbled 4.39%, Meta slid 1.07%, and Tesla decreased 0.70%. Apple and Microsoft bucked the trend, rising 1.16% and 1.04% respectively.
According to reports citing anonymous sources, OpenAI’s Chief Financial Officer Sarah Friar recently warned company executives that insufficient revenue growth could jeopardize the company’s ability to cover AI data center expenses. The CFO and board’s push for cost controls and financial discipline reportedly conflicts with CEO Sam Altman’s aggressive expansion strategy as the company prepares for its IPO. OpenAI has allegedly missed monthly revenue targets multiple times this year.
The news rippled through AI-related stocks. Oracle, which signed a five-year, $300 billion collaboration agreement with OpenAI, fell 4.05%. Semiconductor companies AMD and Micron dropped 3.41% and 3.86% respectively.
Geopolitical tensions added pressure to markets. Negotiations between the United States and Iran have reached an impasse. White House Press Secretary Caroline Leavitt stated that President Trump held a National Security Council meeting to discuss Iran’s proposal, emphasizing that “the President’s red lines are very clear.” Iran had previously proposed opening the Strait of Hormuz first, declaring a ceasefire, and conducting nuclear negotiations afterward.
Oil markets surged amid the UAE’s decision to exit OPEC. Brent crude climbed 2.8% to $111.26 per barrel, marking its seventh consecutive trading day of gains. West Texas Intermediate (WTI) crude jumped 3.7% to $99.93 per barrel and briefly crossed the $100 threshold during trading for the first time since mid-month.
The United Arab Emirates announced its withdrawal from OPEC and OPEC+ effective the first of next month. The move signals the nation’s intention to independently determine production levels outside the Saudi Arabia-led oil cartel framework.