Financial markets closed mostly lower as a steep selloff in artificial intelligence technology shares and surging oil prices weighed heavily on the S&P 500 and Nasdaq. A report came out midday that had OpenAI's annual revenue falling well short of expectations due to some accounting confusion. Nonetheless, it rippled through the AI trade and tech in general. Meanwhile oil jumped over 3% after news of Iran stepping up strikes on tankers passing through the Strait of Hormuz and the first hurricane of 2026 in the gulf could disrupt production and supply by tomorrow night. There were also hawkish comments from the Fed speeches that weighed more on the stock market than the bond market.
The Nasdaq closed down 1.25%; the S&P was lower by 0.47%; however, the Russell finished up 0.03% as bond yields moved lower and the Dow was up 0.10%. The VIX rose 2% to 15.4. The yield on the 10-year Treasury closed down to 5.23% after yesterday's solid bond auction. Oil rose over 3% for both WTI and Brent with WTI closing at $92 and Brent up to $104. Metals were mixed to slightly higher while crypto saw losses of 2–4%.
Despite tech weighing on the averages, seven of the eleven major sectors finished in the green today. Outperforming sectors included Natural Resources, Cloud, MLP Energy, Energy Infrastructure, Pharmaceuticals, Leisure/Entertainment, Homebuilders, Defense Tech, Internet, and Defense. No earnings of note this afternoon, but Delta reports in the morning. Markets will get consumer sentiment data before the open — which I expect to be lower.
As always, if you have any questions regarding the information in this update, please don't hesitate to contact me.