CNBC Daily Open: Oil takes another hit, but chips steal the spotlight

Taken from CNBC’s Daily Open, our international markets newsletter — Subscribe today

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.

Oil markets had just begun to steady at higher levels — on the back of a fragile ceasefire. Then came another jolt: the United Arab Emirates is set to exit OPEC.

At the same time, warnings about the global economy are growing louder. After billionaire Ray Dalio warned of a U.S. economy in stagflation, JPMorgan CEO Jamie Dimon is now sounding the alarm on a potential debt crisis.

Yet markets did not sell off on oil or macro fears. Instead, a chip-related scare tied to AI demand rattled investors, a reminder of just how deeply embedded that narrative is in their psyche.

"The only thing predictable about life is its unpredictability."

It is an unlikely line from an unlikely source: Remy, the animated rat-turned-cook in the Pixar movie Ratatouille. But it captures the wild happenings of the last 24 hours rather neatly.

Just as oil prices were beginning to find their footing with a tenuous U.S.-Iran ceasefire, the market was hit with the news of the United Arab Emirates' exit from OPEC on May 1.

The loss of one of its most influential members would likely lead to greater volatility in oil prices. The UAE was one of the few producers, alongside Saudi Arabia, that had meaningful spare capacity to influence prices and respond to supply shocks.

Its exit could leave OPEC "structurally weaker" as a consequence, Jorge León, head of geopolitical analysis at Rystad Energy, said.

Meanwhile, macroeconomic warnings are intensifying. A day after billionaire investor Ray Dalio raised the specter of a U.S. economy in stagflation, Jamie Dimon warned that rising government debt could trigger a bond market crisis.

"The way it's going now, there will be some kind of bond crisis, and then we'll have to deal with it," Dimon said.

"The level of things that are adding to the risk column are high, like geopolitics, oil, government deficits," he added. "They may go away, but they may not, and we don't know what confluence of events causes the problem."

Given that backdrop, a risk-off move in markets might seem inevitable. It came, but not for those reasons.

Instead, stocks pulled back from their records on a chip sell-off after a report in The Wall Street Journal said OpenAI has fallen short of its own projections for user growth and revenue.

The miss has raised internal concerns about whether the company can sustain the massive financial commitments required to build out data centers and secure long-term computing capacity.

The reaction underscores a shift in market psychology: while geopolitics and macro risks loom large, it is the AI narrative that continues to drive sentiment — and volatility.

In other words, the rat was right: Predictably unpredictable!

‘Draconian development’ in Meta-Manus deal draws the line in China’s AI race with the U.S.

 China's decision to block U.S. tech giant Meta's $2 billion acquisition of artificial intelligence startup Manus is being seen by analysts as a warning to tech entrepreneurs.

"Clearly after Manusgate, founders will know that if you start in China, you stay in China," said Duncan Clark, an early advisor to Alibaba and chairman of consultancy firm BDA China.

"We know the deal was already in trouble," he said, "but this draconian development is on the more extreme side of the likely outcomes."