Tech shares fall on poor OpenAI revenue report

2 hours ago

(AWP Alliance News) - Shares ended mostly lower in New York on Thursday despite cooling Treasury yields on reports that OpenAI is headed for an annual revenue result lower than some on Wall Street have expected.

The Dow Jones Industrial Average closed up 51.77 points, 0.1%, at 51,231.64. The S&P 500 fell 36.41 points, 0.5%, to 7,765.36. The Nasdaq Composite ended down 345.35 points, 1.3%, at 27,193.34.

"Global equities fell for a second session as Treasury yields climbed to multi-decade highs while oil prices surged amid renewed US-Iran tensions and hawkish Fed minutes, pushing the 10-year Treasury yield to 5.35%, its highest since 2002. AI infrastructure stocks came further under pressure amid concerns regarding the impact higher borrowing costs have on AI capital expenditure. Markets still price an 78% chance of an October Fed hold, but a 68% probability of a 25-basis-point hike in December," said IG Chief Technical Analyst Axel Rudolph.

Yields came off their highs after US President Donald Trump said he does not intend to strike Iran before the US midterm elections.

The yield on the 10-year US Treasury was at 5.23% late Thursday, down from 5.29% on Wednesday. The 30-year yield fell to 5.61% from 5.67%.

A barrel of Brent fetched USD104.03 late Thursday, up from USD101.03 on Wednesday. West Texas Intermediate rose to USD91.33 from USD88.96.

President Donald Trump on Thursday ruled out attacking Iran before the US midterm elections on November 3, saying Washington was holding "productive discussions" with Tehran.

"I want to make it clear to everybody that, while Iran is in very bad condition, both Economically and Militarily, and while the Blockade will remain in full force and effect...we will not be attacking Iran at any time prior to the Midterm Elections," he wrote.

"We are having productive discussions with the Islamic Republic of Iran," he added, without providing additional details.

In a recent sign of those tensions, an oil tanker sailing off the north coast of Qatar reported being struck "by multiple projectiles," causing an unspecified number of casualties, the UKMTO maritime agency said Wednesday.

The Financial Times on Thursday said ChatGPT-maker OpenAI is on track to generate annualised revenue around USD50 billion, up from the prior year but less than some recent estimates.

Media reports last month said OpenAI was already on track to generate nearly USD70 billion in annualised revenue.

The Financial Times earlier reported the new financial estimate. Sources told the newspaper that the discrepancy is due to attempts by OpenAI's investors to more directly compare its figures to rival Anthropic PBC, including how it accounts for sales through cloud providers.

Competitor Anthropic's annualised revenue hit USD65 billion by the end of July, Bloomberg News previously reported.

OpenAI backer Microsoft slid 1.4% even as it unveiled a new Surface Ultra laptop that runs on Nvidia artificial intelligence chips. The new device will cost more than USD2,500.

Additionally, the company's CEO Satya Nadella was one of several key technology executives, including Elon Musk, who were formerly recognised by US President Donald Trump on Thursday at a summit, dubbed "Science: A New Golden Age."

"Elon, I want to congratulate you. You're my friend, and all of that," Trump said, "but you are a very, very special guy," Trump added. A former administration official, Musk acrimoniously departed from Trump's cost-cutting Department of Government Efficiency last year.

Along with Musk, Google co-founder Sergei Brin, Nvidia CEO Jensen Huang and Advanced Micro Devices Chief Lisa Su all received the National Medal of Science from Trump during the ceremony.

Negatively, Vice President JD Vance said Thursday that Microsoft was being suspended from a key visa programme. Vance accused Microsoft of abusing the H-1B visa programme for highly-skilled foreign workers, saying they had "laid off 6,000 American workers while replacing them with 6,300 H-1Bs."

Software firm Adobe was also being suspended from the visa programme, Vance said.

Adobe gained 3.6% on Thursday. SpaceX sank 4.2%, AMD lost 3.9% and Google-parent Alphabet closed down 0.7%.

Nvidia fell 2.9%. At the summit, the company said it would invest USD1 billion in "super intelligence" R&D in the US, including in the fields of quantum computing, healthcare, energy security.

The trust that holds US President Donald Trump's assets bought between USD5 million and USD25 million in Meta shares in August, the Office of Government Ethics said Thursday.

Additionally, the trust bought SpaceX bonds totalling between USD1 million and USD5 million.

Against the dollar, the euro was at USD1.1214, up from USD1.1196, on Wednesday. Sterling rose to USD1.3231 from USD1.3212. Against the yen, the dollar was at JPY157.87, down from JPY158.05.

Gold rose to USD4,133.47 an ounce from USD4,101.94.

In Europe, the FTSE 100 closed down 0.2% in London. The CAC 40 in Paris lost 0.5%. The DAX 40 in Frankfurt slid 1.2%

In China, the Shanghai Composite Index fell 0.8%. The Hang Seng Index in Hong Kong dropped 1.4%, as did the Nikkei 225 in Tokyo. The S&P/ASX 200 lost 0.8% in Sydney.

Friday's corporate calendar has third quarter results from Delta Air Lines.

The global economic calendar includes the Michigan consumer sentiment index, Japan household spending and Canada unemployment. Markets in Taiwan are closed for Double Tenth Day.

By Aidan Lane, Alliance News reporter

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