The Chips are Down: OpenAI's Struggles Hit Tech

Published as of: April 28, 2026, 9:09 a.m. ET

(Tuesday market open) The high-flying chip sector reversed course early today after The Wall Street Journal reported that OpenAI missed key revenue and user targets. A long list of major chip stocks declined 3% or more, pinning the Nasdaq Composite amid sudden questions about the strength of AI demand.

Checking Middle East developments, there's no progress easing the conflict, Reuters reported, as President Trump appeared disappointed with Iran's latest proposal to open the Strait of Hormuz in return for an end to the U.S. blockade. Adding to bearish sentiment, the Bank of Japan (BoJ) sounded hawkish while keeping rates unchanged at its meeting today. Three policymakers voted for a hike and the BoJ lifted its inflation forecast. U.S. Treasury yields hit three-week highs this morning, which, combined with crude nearing $100 per barrel and volatility on the rise, painted a bearish picture for equities.

Major indexes mostly edged up Monday to new record highs for the S&P 500 and the Nasdaq Composite, though gains cooled from last week's blistering pace. Volume remained below average, an ongoing theme that raises questions about conviction behind the rally. Just three of 11 S&P 500 sectors started the week higher, and two were mega cap dominated tech and communication services. Discretionary stocks fell ahead of key earnings today from General Motors (GM), Starbucks (SBUX), Coca-Cola (KO), and United Parcel Services (UPS).

1. Chips down as OpenAI worries emerge: Stocks losing ground today on The Wall Street Journal report about OpenAI included Arm Holdings (ARM) down 9%, CoreWeave (CRWV) down 7%, Oracle (ORCL) down almost 7%, and Advanced Micro Devices (AMD) down nearly 6%. Nvidia (NVDA) fell almost 3%. CoreWeave and Oracle both have large deals with OpenAI, which owns ChatGPT, and this news raises concerns about whether OpenAI can meet its spending commitments. The report came at a crucial juncture for the chip sector ahead of Magnificent Seven earnings and their updated spending plans, even as the newspaper reported that OpenAI's leaders are concerned whether the firm will be able to support its own massive spending on data centers. OpenAI missed multiple revenue targets this year, losing ground to competitors and missing its internal goal of reaching one billion active weekly users for ChatGPT by the end of 2025, the newspaper said. One question is whether the issues are isolated to OpenAI or extend to competing AI developers like Anthropic—the maker of Claude—and Alphabet's (GOOGL) Gemini. Another is whether this relates to what The Wall Street Journal recently reported is a shortage of computing power that's led to reliability problems at OpenAI and the others. As the paper noted earlier this month, demand is growing faster than the infrastructure needed to support it, frustrating some users. More consumers report using AI, with 24% using it often in April, up from 17% in November, according to new data from market researcher Ipsos.
    
2. Mag 7 questions abound ahead of earnings: The Magnificent Seven earnings parade marches into town Wednesday and Thursday afternoon, with focus on data center spending, iPhone sales, Apple's recent CEO news, and online advertising. Investors will also look for continued sequential revenue growth, a possible sign of AI investments paying off. "Capital expenditures guidance will be key," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR), in his Weekly Trader's Outlook. "Given all the read-through on demand from last week's earnings reports from the chip stocks—along with recent layoff announcements—one would think that CapEx is likely going to be revised higher." Guidance could be more influential than quarterly results. Several large firms saw shares beaten down lately when they topped quarterly consensus while their outlooks failed to impress. Also, there's been a massive move into bullish positions across the tech space as last month's hedges came off. All this bullish energy could mean volatility if any companies in the spotlight have earnings missteps. And today's OpenAI stumble raises the stakes, meaning investors might be even more attuned to any signs of a spending slowdown.
    
3. Strange brew as oil, dollar match moves: Traditionally, crude oil and the dollar mix like oil and water, often traveling separate ways. That's not the case recently, with front-month crude oil futures and the U.S. Dollar Index ($DXY) at around 0.82% on a correlation scale of -1% to 1%. One factor keeping the dollar strong is relatively firm U.S. Treasury yields, which reflect the rally in crude that's reduced odds of near-term rate cuts. The three different markets are holding each other up, and if the conflict eases, all three might fall. The oddball here is the dollar, which typically eases amid inflation, but may be getting some strength from market participants jumping in for perceived geopolitical "safety." Ideas that the trio might relax some of their strength could be contributing to bullish ideas in equities. On the other hand, persistent oil firmness could keep this triple threat elevated, eventually weighing more on stocks. If the correlation starts to unwind, it may be a sign that investors were correct to get bullish this month, and that the market might return to more traditional ways of trading.

• Coca-Cola (KO) bubbled up 3% in early trading after topping Wall Street's earnings and revenue consensus. Unit case volume grew 3%, led by China, the U.S. and India, and Coca-Cola Zero Sugar made double-digit gains.
   
• General Motors (GM) edged up as the company raised guidance and easily topped Wall Street's earnings and revenue expectations. Earlier, shares rose as much as 5% but pared gains before the open. Revenue fell 0.9% year over year but was in line with estimates.
   
• Spotify (SPOT) tumbled nearly 9% in early action after reporting softer-than-expected operating income guidance for the current quarter, CNBC reported. Second quarter revenue guidance met expectations, however, and quarterly earnings surpasses consensus.
   
• Bed Bath & Beyond (BBBY) climbed 28% in early trading after the retailer's loss narrowed from a year ago and revenue exceeded analysts' expectations. It was the first time in 19 quarters that BBBY logged significant revenue growth, Barron's noted.
   
• United Parcel Service shares fell nearly 5% in early trading despite the shipping firm beating Wall Street's earnings and revenue estimates. UPS kept its financial outlook unchanged. Volume in the company's U.S. segment fell, but that was as expected as UPS leaves some of its low-profit business with Amazon (AMZN), Barron's noted.
   
• Corning (GLW) plunged 11% early today despite beating analysts' revenue and earnings expectations and keeping its guidance in line, with expected revenue for the second quarter slightly below the FactSet consensus.
   
• Snap (SNAP) climbed 8% Monday after Rothschild upgraded shares to buy from neutral.
   
• The United Arab Emirates (UAE) announced it's leaving OPEC.
   
• Microsoft (MSFT) inched up Monday after announcing an amended agreement with OpenAI in which OpenAI will be allowed to have more flexibility to operate across the market and not be confined to Microsoft's Azure cloud, though OpenAI will remain Microsoft's primary cloud partner and Microsoft maintains access to OpenAI's growth. Microsoft fell early Tuesday after The Wall Street Journal's report on OpenAI and its struggles.
   
• The PHLX Semiconductor Index (SOX) fell 1% Monday to end an 18-session win streak despite new highs for Nvidia, Intel (INTC), SanDisk (SNDK), and Micron (MU). SanDisk got a lift Monday when Melius Research initiated coverage with a buy rating.

For insight into the stock market's recent record run, check the futures curve for crude oil at the CME Group. The current curve (red line) drops from today's $96 per barrel to just over $76 by next February. That's pretty much unchanged from the curve a month ago (yellow line). In other words, a month has gone by with little to no progress solving the Iran conflict, but futures trading is convinced that crude oil will steadily fall between now and early next year, a prediction that's unchanged from a month ago. It could be interesting to see if the yellow curve starts to flatten in coming weeks if there's no resolution, but for now it seems optimism around crude could be one reason for the steady tailwind behind stocks.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

April 29: February housing starts and building permits, March durable orders, February new home sales, FOMC interest rate decision, and expected earnings from Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta (META), AbbVie (ABBV), and Qualcomm (QCOM).
April 30: ECB rate decision, Q1 GDP first estimate, March PCE and core PCE prices, and expected earnings from Apple (AAPL), Eli Lilly (LLY), Mastercard (MA), Caterpillar (CAT), Merck (MRK), ConocoPhillips (COP), Amgen (AMGN), Altria (MO), SanDisk (SNDK), and Western Digital (WDC).
May 1: April ISM Manufacturing PMI, and expected earnings from Exxon-Mobil (XOM), Chevron (CVX), and Colgate-Palmolive (CL). Earnings from Berkshire Hathaway (BRK.B) are expected on Saturday, May 2.
May 4: Expected earnings from Palantir (PLTR), Vertex Pharmaceuticals (VRTX), and Tyson Foods (TSN).
May 5: ISM April Services PMI® and expected earnings from Advanced Micro Devices (AMD), Arista Networks (ANET), Lumentum (LITE), Strategy (MSTR), Eaton (ETN), Shopify (SHOP), Pfizer (PFE), Anheuser-Busch Inbev (BUD), and Duke Energy (DUK).