S&P 500 Falls as Reports on OpenAI Sink Chipmakers: Markets Wrap
(Bloomberg) — A selloff in chipmakers weighed on stocks as speculation around OpenAI’s revenue revived worries that the artificial-intelligence spending spree is becoming harder to justify.
Tech shares led losses in the S&P 500 on reports that annualized revenue at the ChatGPT maker will be lower than some estimates for the firm. The Nasdaq 100 fell 1.4%. A gauge of chip giants sank 3.4%. Oil jumped, but settled below session highs as President Donald Trump said the US won’t attack Iran before the midterm elections. Treasuries rose on a solid sale of 30-year bonds.
OpenAI is on track to generate annualized revenue of roughly $50 billion based on its current performance, according to people familiar with the matter. Some outlets reported last month it was already on track to generate nearly $70 billion. The Financial Times earlier reported the new financial estimate.
Insatiable demand for all things related to AI had powered a surge in chipmakers from this year’s market lows. But volatility has resurfaced amid worries about the staying power of an investment boom propped up by rising debt levels.
“Investors are becoming a bit skeptical about how long this huge AI spending can last with borrowing costs rising in a significant way,” said Matt Maley at Miller Tabak.
“We retain strong conviction in the AI growth story, and believe AI-related investment remains a powerful tailwind for the broader equity market,” Ulrike Hoffmann-Burchardi at UBS Chief Investment Office said in a recent note. “But the increasing concentration of market gains reinforces the importance of managing risk through a broadly diversified equity portfolio.”
This is particularly relevant to AI, where it is not yet clear how value creation will ultimately be distributed among chip designers, cloud providers, model developers, and application companies, she added.
“Ongoing questions over returns on investment, AI safety, financing, and execution could also contribute to periods of volatility, especially while elevated yields increase the cost of capital,” Hoffmann-Burchardi noted. “Diversification can help investors retain exposure to the structural opportunity without relying excessively on a narrow group of market leaders.”
Traders also kept an eye on the latest remarks from central bank officials.
Federal Reserve Governor Christopher Waller said further rate hikes will likely be needed, though officials have some flexibility on timing and don’t need to tighten at consecutive meetings. Fed Bank of St. Louis President Alberto Musalem signaled rates should increase over the next six-to-nine months, but stopped short of endorsing a move at this month’s gathering.
Corporate Highlights:
The Trump administration accused Microsoft Corp., Adobe Inc. and a half-dozen other companies of abusing a US worker visa program and suspended them indefinitely from a longstanding immigration initiative that’s served as a crucial talent pipeline for Silicon Valley and Wall Street. SpaceX has agreed to buy a nationwide low-band spectrum license portfolio, the Elon Musk-led company said. Oracle Corp. is using a novel power strategy to keep several data centers on track: trucking natural gas directly to the server farms. Chipotle Mexican Grill Inc. jumped after the Financial Times reported that Starbucks Corp. has worked with advisers in recent months on a takeover proposal for the burrito chain. Federal regulators fined American Express Co. $350 million for failing to catch and report money laundering in its system. Humana Inc. surged in late hours as the company improved its performance on crucial Medicare Advantage quality ratings linked to payment. What Bloomberg Strategists say…
“Contrary to popular belief that stocks have shrugged off higher rates, plenty of damage has already been done. Nowhere is the strain more visible than in small caps.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.5% as of 4 p.m. New York time The Nasdaq 100 fell 1.4% The Dow Jones Industrial Average rose 0.1% The MSCI World Index fell 0.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1215 The British pound rose 0.1% to $1.3232 The Japanese yen rose 0.1% to 157.88 per dollar Cryptocurrencies
Bitcoin fell 1.9% to $81,786.79 Ether fell 4.1% to $2,466.9 Bonds
The yield on 10-year Treasuries declined six basis points to 5.23% Germany’s 10-year yield advanced two basis points to 3.49% Britain’s 10-year yield advanced four basis points to 5.48% Commodities
West Texas Intermediate crude rose 2.8% to $90.78 a barrel Spot gold rose 0.6% to $4,134.68 an ounce ©2026 Bloomberg L.P.
