Nasdaq 100 Ends Lower As Report Of Weaker-Than-Expected OpenAI Revenue Drags Chipmakers — NVDA, DIS, ORCL, SBUX In Focus

• The S&P 500 ended Thursday 0.5% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average added 0.1%.
• The Philadelphia Semiconductor Index (SOX) fell 3.4%. 
• Donald Trump said the U.S. won’t attack Iran before the midterm elections. 

U.S. stock indices ended lower on Thursday after reports showed OpenAI’s annualized revenue was $20 billion below expectations, sparking a selloff in chipmakers and broader AI-linked stocks. 

The S&P 500 ended Thursday 0.5% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average rose 0.1%. The Russell 2000, which tracks small-cap stocks, ended flat.

The SPDR S&P 500 ETF (SPY) slipped 0.4%, the SPDR Dow Jones Industrial Average ETF (DIA) added 0.1%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) fell 1.3%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) fell between 2.5% and 3.5%, tracking weakness in Nvidia (NVDA), Advanced Micro Devices (AMD), Intel (INTC) and Micron Tech (MU). The broader Vanguard Information Technology ETF (VGT) fell 1.5%.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

Major technology equities dropped following disclosures that OpenAI’s annualized revenue fell short of target projections. Financial documents provided to investors reveal that OpenAI’s annualized revenue is about $20 billion lower than previously indicated, potentially cooling exuberance around the pace of artificial intelligence demand, according to a Financial Times report.

Shares of Oracle (ORCL) fell more than 5%, while semiconductor leaders Nvidia and Advanced Micro Devices fell nearly 3% and 4%, respectively, after the report's release.

“Investors are becoming a bit skeptical about how long this huge AI spending can last with borrowing costs rising in a significant way,” Matt Maley at Miller Tabak told Bloomberg. 

Furthermore, energy prices also surged, pressuring equities after President Donald Trump signaled reluctance to negotiate a settlement with Iran, amid reports of potential military escalation in the region. 

Crude futures later pulled back from peak levels after Trump clarified that military action would not occur before next month’s midterm elections. International benchmark Brent crude gained 4.1% to $104.28 per barrel, while domestic West Texas Intermediate futures climbed 3.6% to settle at $91.49.

In fixed income, investors monitored sovereign yields after the 10-year and 30-year Treasury yields reached multi-decade highs earlier in the session. Yields eased after strong demand at the Treasury’s latest debt auction, leaving the benchmark 10-year note down 5 basis points to 5.23%, while the 30-year bond yield fell 6 basis points to 5.60%.

Key Trending Stocks

The Walt Disney Co.(DIS) has been in discussions with competing Hollywood studios about adopting its new premium large-screen branding initiative, Infinity Vision, according to a Bloomberg News report. 

Wall Street is split on a reported Starbucks (SBUX) exploration of a Chipotle (CMG) takeover, with one firm calling the strategic fit worth examining and others doubting the rationale and the odds. 

OpenAI’s annualized revenue is about $20 billion lower than previously indicated, financial documents provided to investors reveal, potentially cooling exuberance around the pace of artificial intelligence demand, according to a Financial Times report. 

President Donald Trump bought up to $25 million in Meta Platforms Inc. (META) shares in August, his largest reported transaction among 517 securities trades that month.

Coca-Cola (KO) is reportedly again weighing a sale of Costa Coffee, months after an earlier auction collapsed for lack of bids that met its price.

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