Oil Flirts With $100 as Tech Sells Off and AI Growth Doubts Resurface

WTI crude ripped 3.69% higher, closing at $99.93/bbl, and the rest of the stock market today felt every penny of it. Reports that President Trump is dissatisfied with Iran's proposal to reopen the Strait of Hormuz sent energy prices surging, while a separate bombshell about OpenAI missing its own revenue targets dragged chip and AI infrastructure names lower. The result was a textbook risk-off session: oil up, tech down, and defensive sectors quietly collecting gains.

The combination hit growth stocks especially hard. The Nasdaq Composite dropped -0.90%, and the S&P 500 shed -0.49%. Small caps fared even worse, with the Russell 2000 falling -1.25% as higher energy costs and rising yields squeezed the most rate-sensitive corner of the market.

Market Scorecard

The Dow Jones held up best among the major indexes, slipping just -0.06% to 49,136.45, as its heavier weighting toward value and defensive names cushioned the blow. Treasury yields crept higher across the curve, with the 10-Year adding 1.8 basis points to 4.354% and the 5-Year climbing 3.6 basis points.

Gold dropped -1.38% to $4,610.70, an unusual move lower on a risk-off day, though rising real yields likely pulled some shine off the metal. Bitcoin fell -1.29% to $76,370.76, tracking equities lower.

Why Is the Nasdaq Falling in the Stock Market Today?

Two stories collided to make this session miserable for growth stocks. First, the oil spike. With Brent crude topping $110/bbl and WTI knocking on the door of $100, inflation fears came roaring back.

Higher energy costs eat into corporate margins and consumer spending, and they make the Fed's job harder. Yields ticked up across the curve, and that's never a friend to long-duration growth names.

Second, and arguably more damaging to sentiment, the Wall Street Journal reported that OpenAI has recently missed its own projections for user growth and revenue. OpenAI's CFO Sarah Friar reportedly warned colleagues that if revenue growth doesn't accelerate, the company could face difficulty funding future compute agreements.

OpenAI pushed back on the report, calling it "ridiculous," and Oracle defended the partnership's trajectory. But the market didn't wait for the rebuttal.

Why Did Chip and AI Stocks Drop Today?

The OpenAI report sent a chill through the entire AI supply chain. Oracle, which has a $300 billion, five-year partnership to supply computing power to OpenAI, dropped more than 3%. Chipmakers Nvidia, Broadcom, and AMD declined between roughly 3% and 4%.

CoreWeave fell more than 4%. In Asia, SoftBank Group, one of OpenAI's largest investors, sank about 10%.

The question traders are asking is straightforward: if the company at the center of the AI spending boom can't hit its own growth targets, what does that mean for the hundreds of billions being poured into data centers and compute infrastructure? It's a question that won't be answered today, but it's clearly weighing on positioning ahead of big tech earnings this week.

Why Are Oil Prices Surging Toward $100?

The oil story had multiple layers. Trump told his advisors he's not satisfied with Iran's proposal to reopen the Strait of Hormuz, which carries about a fifth of the world's oil and LNG. Iran offered to reopen the strait if the U.S. lifts its naval blockade, but Tehran wants to leave nuclear discussions for a later date.

Secretary of State Rubio was publicly skeptical, saying Iran is trying to normalize a system where it decides who uses an international waterway.

Energy flows through the strait remain severely disrupted, with roughly 20 million barrels per day of crude, fuels, and petrochemicals affected. Even if hostilities ended immediately, a return to normal market conditions would take months due to mines, tanker congestion, and the need to restart production and refining.

On top of that, the UAE announced it's leaving OPEC starting Friday. That adds another layer of uncertainty to global supply dynamics at the worst possible time for consumers and central bankers hoping for lower energy costs.

Sector Performance

The sector rotation told the whole story of the stock market today. Energy (XLE) led all sectors with a +1.67% gain, riding the crude oil surge. Defensive names followed: Real Estate gained +0.99% and Consumer Staples added +0.92%, with Coca-Cola raising its profit forecast and playing down the impact of high oil prices.

At the bottom, Technology (XLK) fell -1.69%, absorbing the double hit of the OpenAI report and rising rate expectations. That's a 3.36 percentage point spread between the best and worst sectors, a clear sign of aggressive rotation out of growth and into value.

What Should Traders Watch in Big Tech Earnings This Week?

The OpenAI revenue miss landed at the worst possible time, right before the biggest week of earnings season. Big tech reports are coming, and the market is clearly nervous about whether AI spending is translating into actual returns.

Corning offered a mixed read on the session. The glassmaker beat earnings estimates, with core revenue up 18% year over year to $4.35 billion, and announced two new long-term supply agreements similar in size to its up-to-$6 billion deal with Meta.

But shares fell more than 7% after a 92% year-to-date run into the print. Sometimes a beat isn't enough when expectations are already priced for perfection.

Spotify also tumbled over 13% after soft guidance overshadowed an earnings beat. Revenue rose 8% to 4.5 billion euros, and monthly active users hit 761 million.

But premium subscriber guidance for Q2 came in below expectations at 299 million versus the Street's 300.4 million, and operating income guidance missed by about 50 million euros.

What Do Inflation-Protected Bonds Signal About the Stock Market Right Now?

JPMorgan CEO Jamie Dimon added to the day's anxiety by warning that rising government debt levels could trigger "some kind of bond crisis." He pointed to the growing mix of risks, including geopolitics, oil, and government deficits, and said policymakers should address them before markets force the issue.

That backdrop is pushing some investors toward Treasury inflation-protected securities, or TIPS, as oil prices reignite inflation concerns. With the 30-Year yield sitting at 4.944% and barely budging on the day, the long end of the curve is signaling that inflation expectations are sticky.

The Strait of Hormuz disruption affects roughly 20 million barrels per day, and even an immediate resolution would take months to normalize shipping and production flows.

Looking Ahead: Next Trading Day

Tomorrow's Q1 GDP advance reading at 8:30 ET will set the tone before the open. After today's session, the stock market today is already priced for bad news on the growth front.

A weak number could deepen the risk-off move, while a strong print might reignite the inflation debate given where oil is trading.

The stock market today showed clear signs of stress at the intersection of geopolitics, AI spending doubts, and sticky inflation fears. With big tech earnings still ahead and oil flirting with triple digits, Wednesday's GDP print will either calm nerves or add fuel to the fire.