Pre-Market Update: S&P 500 and Nasdaq Futures Slip as OpenAI Concerns Hit Tech Stocks

TLDR

• Nasdaq 100 futures fell 0.9% and S&P 500 futures dropped 0.4% in premarket Tuesday
• OpenAI reportedly missed its own sales and user targets ahead of its IPO, dragging down partner stocks like Oracle
• US-Iran peace talks remain stalled, keeping the Strait of Hormuz blocked and pushing oil prices higher
• The Fed begins its two-day meeting Tuesday, with a rate hold expected Wednesday
• Alphabet, Amazon, Meta, and Microsoft all report earnings Wednesday

US stock futures were mixed on Tuesday morning as concerns about OpenAI’s growth weighed on tech stocks and geopolitical tensions kept markets cautious.

Nasdaq 100 futures dropped 0.9%, and S&P 500 futures fell 0.4%, pulling back after both indexes closed at record highs on Monday. Dow Jones futures bucked the trend, rising 0.3%, helped by its lower exposure to tech.

The selloff in tech was triggered by a Wall Street Journal report that OpenAI has fallen short of its own targets for both sales and users ahead of its expected IPO. Oracle shares slumped in premarket trading as a result.

Investors are now closely watching the “Magnificent Seven” megacap tech companies as earnings season heats up. Alphabet, Amazon, Meta, and Microsoft are all due to report on Wednesday.

Apple follows on Thursday. The results will give the market a clearer picture of how AI spending is holding up across big tech.

Geopolitical Tensions Keep Oil Elevated

The US-Iran standoff is adding to market uncertainty. Iran has put forward a proposal to reopen the Strait of Hormuz and pause nuclear discussions, but the Trump administration has expressed skepticism about the terms.

The White House confirmed Trump will respond to the proposal soon. Two months have now passed since US strikes on Iran began.

Oil prices moved sharply higher on Tuesday. Brent crude rose 2.7% to $104.42 a barrel, and West Texas Intermediate climbed 2.6% to $98.83 a barrel.

Deutsche Bank analyst Jim Reid noted that markets are pricing in some probability of an extended stagflationary shock if peace talks fail to progress.

The 10-year Treasury yield rose 2 basis points to 4.36%. The dollar gained 0.2% against a basket of major currencies.

Fed Meeting Begins Tuesday

The Federal Reserve kicks off its two-day policy meeting on Tuesday. Policymakers are widely expected to hold interest rates steady when they announce their decision on Wednesday.

Markets will be paying close attention to Fed Chair Jerome Powell’s comments. Powell’s term as Fed Chair is drawing to a close, adding extra weight to his remarks.

Bitcoin and XRP also declined in early trading Tuesday, according to market data. Crypto markets have been caught in the same cautious mood as equities.

The S&P 500 and Nasdaq both set record closing highs on Monday. Whether that rally can continue depends largely on what earnings and the Fed deliver this week.

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