AI Worries, Oil Prices Halt Wall Street's Rally

Sinking AI stocks and another climb in oil prices helped to halt Wall Street's record-setting rally on Tuesday.

• The S&P fell 35.11 points, or 0.5%, from its latest all-time high to 7,138.80.
• The Dow Jones Industrial Average fell 25.86 points, or 0.1%, to 49,141.93.
• The Nasdaq composite fell 223.30 points, or 0.9%, from its own record to 24,663.80.

Oil prices, meanwhile, rose by more than 2.5% as uncertainty continues about when the Strait of Hormuz could reopen and allow oil tankers to leave the Persian Gulf again, the AP reports.

Stocks in the artificial-intelligence industry led the way lower. Chip company Broadcom was the heaviest weight on the S&P 500 after sinking 4.4%. Drops of 1.6% for Nvidia and 3.9% for Micron Technology also undercut the market. The weakness came after a report in the Wall Street Journal said some leaders at OpenAI are concerned about whether it can support its massive spending on data centers after missing targets for new users and revenue. If the maker of ChatGPT pulls back on its investments, it could bolster criticism that the entire AI industry is in a bubble of over-the-top spending that may not produce the profits and productivity that would make it all worth it.

• The drops came just a day before several of the biggest spenders on AI are scheduled to report their latest results for the start of 2026. They could offer more clues on whether all the investment in AI is producing the kind of returns that shareholders care about. Alphabet, Amazon, Meta Platforms, and Microsoft are all reporting their latest quarterly results on Wednesday.

Also weighing on the stock market was another rise for oil prices on continued uncertainty about what will happen with the Iran war. The price for a barrel of Brent crude oil to be delivered in June climbed 2.8% to settle at $111.26. Brent to be delivered in July, which is where more of the trading is happening in the oil market, rose 2.7% to $104.40. Meanwhile, the average price for a gallon of gasoline in the United States reached $4.18 on Tuesday, the most since 2022, according to the auto club AAA.

• Expensive fuel was one of the reasons JetBlue Airways reported a worse loss for the start of 2026 than analysts expected. But its stock nevertheless rose 1.7% after CEO Joanna Geraghty said the airline saw demand from customers strengthening through the quarter. JetBlue also announced moves it's making to rein in fuel costs, such as cutting some flying.
• Another stock helping to limit Wall Street's losses was Coca-Cola's. It rallied 3.8% after reporting stronger profit and revenue for the latest quarter than analysts expected, thanks in part to strength from China, the US, and India.

In the bond market, Treasury yields held relatively steady after a report showed US consumers are feeling slightly more confident in April, when economists expected to see a decline. On Wednesday, the Federal Reserve is scheduled to announce its latest decision on short-term interest rates. The widespread expectation is that it will hold the federal funds rate steady and hold off on resuming its cuts. Lower interest rates would help the economy, but they also risk worsening inflation when oil is expensive and tariffs are threatening to push prices higher. Also Wednesday, the Senate Banking Committee will vote on whether to confirm President Trump's nominee, Kevin Warsh , to succeed Fed Chair Jerome Powell.