US stock markets fell on Tuesday as concerns over artificial intelligence demand and rising oil prices weighed on technology shares, pulling major indexes away from recent record highs.
The S&P 500 declined 0.7 percent, while the Nasdaq Composite dropped 1.3 percent, dragged lower by losses in major semiconductor and technology firms. The Dow Jones Industrial Average edged up 41 points, or 0.1 percent, supported by gains in defensive stocks such as Coca-Cola.
The sell-off in tech was triggered in part by a report suggesting that OpenAI had experienced weaker-than-expected revenue and user growth, raising concerns about its ability to sustain large computing infrastructure commitments.
The report, cited by US media, said the company’s chief financial officer had internally flagged potential risks to meeting future computing contract obligations if revenue growth does not accelerate.
The news hit semiconductor stocks particularly hard. Nvidia fell more than 3 percent, while Broadcom dropped over 4 percent. Other chipmakers, including Advanced Micro Devices and Intel, also lost around 4 percent each. Software group Oracle declined in tandem.
Analysts said the moves reflected profit-taking ahead of a heavy earnings schedule for major technology companies, with investors awaiting results from firms including Alphabet, Amazon, Meta Platforms, Microsoft and Apple later in the week.
“There’s some caution ahead of earnings from the Magnificent Seven,” one investment strategist said, referring to the group of large-cap US tech stocks that have driven much of the market’s recent gains.
The pullback followed a strong session on Monday, when both the S&P 500 and Nasdaq closed at record highs, underscoring continued volatility in equity markets as investors balance optimism over artificial intelligence with concerns about valuations and demand sustainability.
Oil prices add inflation concerns
Energy markets also contributed to the negative sentiment. Crude oil prices rose sharply for a second consecutive session, with West Texas Intermediate futures climbing above $99 per barrel and Brent crude exceeding $110.
The increase was linked to ongoing geopolitical uncertainty surrounding tensions between the United States and Iran, particularly concerns over the potential closure of the Strait of Hormuz, a key global oil shipping route.
Higher energy prices tend to raise inflation expectations, which can weigh on equity markets by increasing costs for businesses and reducing consumer purchasing power.
Geopolitical backdrop
Markets were also watching developments in US-Iran relations, as diplomatic efforts to revive negotiations appeared stalled. US officials have indicated that discussions remain uncertain, while Iranian authorities have said no formal talks are currently scheduled.
At the same time, reports suggested limited diplomatic backchannel communications regarding possible de-escalation scenarios tied to energy transit routes.
Outlook
Investors are now focused on earnings results from major technology companies, which are expected to provide clarity on demand trends in artificial intelligence infrastructure and cloud computing.
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Market strategists say the coming days will be critical in determining whether recent gains in tech stocks can be sustained or whether volatility will persist amid concerns about valuations, energy costs, and global geopolitical risks.
For now, Tuesday’s trading session reflected a cautious shift in sentiment, as markets reassess the balance between strong technological optimism and emerging macroeconomic pressures.
