Markets Today: Stocks Down, OpenAI Revenues Came In $20 Billion Lower Than Previously Signaled
Stocks are down, with possibly the macro story in the background shining through the reality of a higher lending environment from banks, to come geopolitical uncertainty in the Middle East from the Iran war and then the further complications of Yemen, Lebanon, and of course Palestine. Also, Europe with the Ukraine war with the ongoing tensions between NATO countries and Russia, then the inflationary outcomes. AI is also bringing uncertainty; for taking risk, investing uncertainty is not what people want.
Today there were more companies in the S&P 500 yet the index was still down, and that could point to the mega-cap tech stocks dictating the movement in the markets and where most of the speculation is currently situated in the AI trade. The Dow Jones Industrial Average stock index was up 0.10% on the day. SpaceX, xAI were down around 4%, and Starbucks (ticker name SBUX), the famous coffee chain, was down 0.40% on the day.
Global equity markets slipped as a relentless bond selloff pushed yields higher, fueled by tight labor conditions. US jobless claims reached a historic milestone not seen since 1969 in what economists described as a low-hire, low-fire labor market. Concurrently, the US 30-year fixed-rate mortgage rate jumped to 7.40%, and the Treasury sold $22 billion in 30-year bonds at a high yield of 5.618% as the Bank of England's Bailey urged credible fiscal plans.
Crude oil prices plunged after Donald Trump stated the US is having productive talks with Iran and will not launch strikes before the November midterm elections. The announcement cooled energy markets and reversed earlier gains, despite reports of severe explosions in the Strait of Hormuz and rising European diesel margins.
OpenAI annualized revenues came in $20 billion lower than previously signaled, dragging down Oracle and Microsoft shares. Pressure on big tech mounted further as the US government suspended Microsoft, Adobe, and Infosys from the foreign worker green card program over alleged fraud. All eyes now turn to upcoming corporate earnings and subsequent central bank commentary.