US STOCKS-Nasdaq, S&P 500 fall on renewed AI growth worries ahead of big tech earnings

Spotify Technology

28/04/2026 19:42

Indexes: Nasdaq down 1.07%, S&P 500 down 0.58%, Dow flat

Oracle, chip stocks fall after WSJ report on OpenAI

UPS falls after Q1 profit drops

General Motors slips after results

Coca-Cola rises after lifting annual forecast

UAE to leave OPEC

Updates to mid-afternoon trading

By Stephen Culp and Niket Nishant

NEW YORK, April 28 (Reuters) - The Nasdaq and the S&P 500 backed away from record closing highs on Tuesday as renewed concerns over the artificial intelligence boom weighed on technology stocks days before five of the sector's most high-profile companies were due to post quarterly results.

Semiconductor shares .SOX, which have surged over 40% so far this year, dragged the tech-heavy Nasdaq down the most, while the blue-chip Dow clung to nominal gains.

OpenAI missed internal targets for weekly users and revenue, raising concerns over the AI heavyweight's ability to support its massive spending on data centers, according to a report from the Wall Street Journal.

Shares of Oracle ORCL.N, whose reliance on OpenAI for its cloud computing ambitions has been under scrutiny, fell 3.7%.

Chip stocks also dropped, with Nvidia NVDA.O, AMD AMD.O and Broadcom AVGO.N down between 2.2% and 4.7%. Nvidia-backed CoreWeave CRWV.O slid 4.8%.

        "OpenAI missed their internal targets, but there's lots of other players in the field," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. "It would be a mistake to simply look at a single security or a single earnings event and try to extrapolate that into a broad market."

First-quarter earnings season shifts into overdrive this week, with five of the companies in the Magnificent Seven group of AI-related megacap firms expected to post results. On Wednesday, Alphabet GOOGL.O, Amazon AMZN.O, Meta Platforms META.O and Microsoft MSFT.O are slated to report, with Apple AAPL.O on deck for Thursday.

The companies on deck to report this week account for about 44% of the S&P 500's total market capitalization, according to Raymond James.

General Motors GM.N beat quarterly profit estimates and lifted its full-year earnings forecast, boosted by a resilient U.S. car market and an expected tariff refund. The automaker's shares rose 1.1%.

United Parcel Service UPS.N shares dropped 2.4% after the package delivery company reiterated its full-year revenue target as spiking fuel costs offset underlying business improvement.

Coca-Cola KO.N gained 5.0% following its better-than-expected quarterly report. The beverage giant played down the impact of high oil prices and raised its annual earnings target.

Visa V.N and Starbucks SBUX.O are due to report after the bell.

The Dow Jones Industrial Average .DJI was flat at 49,166.25, the S&P 500 .SPX lost 41.87 points, or 0.58%, to 7,132.04 and the Nasdaq Composite .IXIC lost 265.39 points, or 1.07%, to 24,621.71.

Of the 11 major sectors in the S&P 500, tech .SPLRCT shares were down the most, while energy .SPNY enjoyed the biggest percentage gain.

THE WAR, SOARING CRUDE PRICES, AND THE FED

The U.S. Federal Reserve has convened for what is likely to be Jerome Powell's last monetary policy meeting as chair of the central bank. While the Fed is likely to leave its key interest rate unchanged on Wednesday, the accompanying statement and Powell's subsequent press conference will be parsed for policymakers' views on inflation risk related to the war-related energy price spike.

"We know that the Fed is effectively on hold," Pursche added. "If oil prices remain elevated, does that create an environment where energy-related inflation is not being viewed as transitory any longer, but rather as something that has a very much longer-term impact and might therefore force the Fed to raise rates?"

U.S. President Donald Trump is unhappy with Iran's latest peace proposal because it would delay negotiations on the nuclear issue, dampening optimism that the conflict, which has rattled world markets and sent energy prices soaring, could be close to resolution.

In another blow to oil exporting countries, the United Arab Emirates announced on Tuesday it was withdrawing from OPEC.

Oil prices are 53% higher than pre-war levels as the crucial shipping route through the Strait of Hormuz remains disrupted. Brent crude futures LCOc1 topped $110 a barrel for the first time in three weeks.

Crude prices CLc1 spiked above $100 per barrel, reviving inflation worries, contributing to risk-off sentiment.

Declining issues outnumbered advancers by a 1.63-to-1 ratio on the NYSE. There were 136 new highs and 39 new lows on the NYSE.

On the Nasdaq, 1,686 stocks rose and 2,946 fell as declining issues outnumbered advancers by a 1.75-to-1 ratio.

The S&P 500 posted three new 52-week highs and 14 new lows while the Nasdaq Composite recorded 89 new highs and 85 new lows.

Chips vs the broader market https://www.reuters.com/graphics/USA-STOCKS/xmvjyyollpr/soxvsp.png

 (Reporting by Stephen Culp; Additional reporting by Niket Nishant and Utkarsh Hathi in Bengaluru; Editing by Aurora Ellis)

 ((stephen.culp@thomsonreuters.com;))