The extraordinary stock rally hit a wall today for reasons outside of Iran, a reminder that geopolitical risks are not the only risks investors face after two months of the Middle East conflict dominating the headlines. OpenAI reportedly missed its own goals for new user acquisition and sales, which fueled worries that the firm may struggle to support its AI infrastructure spending. That spending had already received some skepticism after OpenAI’s internal estimate pushed its profitability timeline from 2029 to 2030. Business partners that work closely with OpenAI, such as Oracle and CoreWeave, saw their stock prices take hits, as did major semiconductor designers and makers.
The Dow Jones Industrial Average, an index with much less exposure to semiconductor stocks, ended the day flat at 49,192. The Nasdaq, a technology-heavy index, dipped 1.01% to 27,029. The S&P 500, an index that is balanced yet increasingly concentrated in technology, lost half a percentage point to 7,139.
The bond market rose further on higher oil prices as inflation remained a concern for income investors. The U.S. 5-year Treasury yield is now 3.98%, 3 basis points higher than yesterday, and the 10-year yield is 4.35%, one basis point higher than yesterday. Gold also took a hit and is nearly down to the $4,600 mark.
Looking at today’s economic reports, real estate prices came in lower than expected, in line with many real estate-related reports showing that the housing market is cooling. Consumer confidence, on the other hand, rose surprisingly as job prospects for the next six months improved, though the index is still subdued compared with prior years.
We look forward to tomorrow’s Federal Reserve action, for which the market has priced in 100% certainty that interest rates will stay the same, a remarkable feat. This is Adams Wealth Advisors, and we will be back tomorrow.