S&P 500 pulls back from record Tuesday, Nasdaq closes lower as chip stocks sell off: Live updates

The S&P 500 fell on Tuesday, weighed down by a report that pointed to weakness in OpenAI as well as a rise in oil prices.

The broad market index fell 0.49% to close at 7,138.80, while the tech-heavy Nasdaq Composite shed 0.9% and ended at 24,663.80. The Dow Jones Industrial Average slid 25.86 points, or 0.05%, to settle at 49,141.93. Losses in the blue-chip index were kept in check by a nearly 4% gain in shares of Coca-Cola after the company reported better-than-expected earnings.

OpenAI recently saw revenue and new users growth that were below its own targets, according to a Wall Street Journal report. The report added that CFO Sarah Friar told leadership she was concerned OpenAI may not be able to pay computing contracts in the future if its top line doesn't expand fast enough.

Chip stocks dropped on the report, with the VanEck Semiconductor ETF (SMH) sliding about 3%. Nvidia lost more than 1%, while Broadcom pulled back more than 4%. Advanced Micro Devices was down more than 3%, while Oracle declined around 4%.

There's "just some profit taking out of caution ahead of what they're going to hear tomorrow from the earnings reports" from a majority of Magnificent Seven companies, said Stephen Kolano, CIO of Integrated Partners.

Major earnings reports are on deck for the stock market this week, with five of the "Magnificent Seven" tech titans slated to report. Alphabet, Amazon, Meta Platforms and Microsoft are due Wednesday, while Apple's results are set for Thursday.

Tuesday's moves come after the S&P 500 and Nasdaq hit record highs on Monday. However, the market's gains were kept in check as peace talks between the U.S. and Iran appeared to come to a standstill.

Over the weekend, President Donald Trump canceled plans to send U.S. special envoy Steve Witkoff and Jared Kushner to Pakistan to discuss the ceasefire in Iran. In a Truth Social post, the president said that negotiations could happen over the phone. Esmaeil Baqaei, Iran's Foreign Ministry spokesperson, said that no meetings are currently planned between Tehran and Washington.

In a bit of positive news, White House press secretary Karoline Leavitt confirmed on Monday that Trump and his national security team have discussed Iran's offer to reopen the Strait of Hormuz if the war ends and the U.S. lifts its blockade.

To be sure, crude prices were higher again on Tuesday. West Texas Intermediate futures jumped more than 3% to settle at $99.93 per barrel. Brent futures gained 2.8% to close at $111.26 per barrel.

The three major averages finished in negative territory on Tuesday.

The S&P 500 dropped 0.49% to 7,138.80, while the Nasdaq Composite declined 0.9% to 24,663.80. The Dow Jones Industrial Average shed 25.86 points, or 0.05%, to 49,141.93.

Small-cap stocks pulled back on Tuesday as investors took profit following a big rally over recent weeks.

The Russell 2000 fell 1.2% in the session. By comparison, the broad S&P 500 lost around 0.5%.

The Russell 2000 has surged more than 10% in April, on track for its best month since 2024. April's rally propelled the index up 11% for 2026.

Oracle defended OpenAI's growth trajectory, saying it's seeing firsthand how quickly adoption of OpenAI's technology is accelerating.

"We're incredibly excited about our partnership with OpenAI and remain focused on building and delivering the capacity they need to support rapidly growing demand," an Oracle spokesperson said. "OpenAI's new 5.5 model is a significant step forward, and we expect continued momentum as access to their technology expands across cloud providers."

The comment came after a Wall Street Journal report that OpenAI has fallen short of internal growth expectations, raising fresh questions about whether the pace of spending across the sector is sustainable.

Oracle, which has a $300 billion, five-year partnership to supply computing power to OpenAI for AI operations, dropped more than 3% Tuesday but off the lows of the day.

The software sell-off is altering Citi's outlook on Palantir's stock.

Citi reiterated its buy rating on the stock in a Monday note, but cut its price target to $210 from $260. That implies a nearly 47% gain from Monday's close. Analyst Tyler Radke said that the company's momentum appears strong, with new and renewing contracts with both the government and private sector.

However, the price target cut is due to multiple compression within the software sector, which has come as the group has sold off over concerns about artificial intelligence disrupting companies' business models. But Radke reiterated it sees Palantir as one of the top AI beneficiaries.

"Bookings / RDV," remaining deal value, "growth could see another triple-digit growth, which will drive more upside revision to longer-term numbers," Radke wrote. "We raise our LT growth trajectory by 3pts, with FY27 top line of 52% YoY."

— Davis Giangiulio

Here's how much the Magnificent Seven companies have rallied this month ahead of earnings:

Alphabet, Amazon, Meta Platforms and Microsoft report results Wednesday, while Apple's is scheduled for Thursday.

The average price for a gallon of regular gas has hit $4.176, the highest since August 2, 2022, according to AAA.

Retail pump prices are reacting to gains in the cost of a barrel of West Texas Intermediate crude oil, which briefly topped $100 on Tuesday before pulling back. Brent crude futures, the global benchmark for oil prices, got as high as $112.70 a barrel, the highest since March 31.

Brent prices rallied early in the day as traders assessed the latest proposals to re-open the vital Strait of Hormuz at the mouth of the Persian Gulf, through which 20% of the world's crude oil flowed before the outbreak of the Iran war.

— Nick Wells and Scott Schnipper

On Tuesday, 12 stocks in the S&P 500 reached new 52-week lows.

Tickers that hit this milestone included:

Just three stocks in the index traded at new 52-week highs:

— Lisa Kailai Han and Christopher Hayes

Semiconductors dropped Tuesday, taking a pause from its recent rally.

The VanEck Semiconductor ETF (SMH) was down 3.9% in midday trading. It's still up more than 26% in April, and 35% year to date.

— Sarah Min

Industrials stocks were headed for their worst day going back to March 30, which also marks the low for the S&P 500 since the start of the Iran war.

The S&P 500 Industrials sector is down 1.5% in midday trading, as higher pricing pressures weigh on demand.

Pentair, the biggest laggard in the sector, was down more than 8% after issuing lackluster second quarter guidance.

The S&P 500 and Nasdaq Composite declined on Tuesday morning.

The broad market index declined 0.6%, while the tech-heavy Nasdaq lost 1.2%. The Dow Jones Industrial Average advanced 146 points, or 0.3%.

The United Arab Emirates announced Tuesday that it will exit OPEC on May 1.

"This decision follows a comprehensive review of the UAE's production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market's pressing needs," the UAE energy ministry said in a statement.

The UAE was the third-largest producer in OPEC in February, behind Saudi Arabia and Iraq. It joined OPEC in 1967, seven years after the organization was established. Read more.

— Spencer Kimball and Emma Graham

Apple earnings should be strong as the company continues to roll out personal devices that are popular among consumers despite an ongoing memory supply crunch, according to UBS.

The investment bank raised its price target on shares to $287 from $280, implying 7.2% from Monday's close. The move comes just two days before Apple reports fiscal second-quarter earnings.

"Supply chain strength and sustained demand/share gains for the iPhone 17 series should lift iPhone rev up ~20% YoY," analyst David Vogt said Monday in a note to clients.

CNBC Pro subscribers can read more here.

Shares of companies tied to artificial intelligence infrastructure tumbled in early trading Tuesday after a report that OpenAI has fallen short of internal growth expectations, raising fresh questions about whether the pace of spending across the sector is sustainable.

Oracle dropped about 7.5% in premarket trading Tuesday. Oracle has a $300 billion, five-year partnership to supply computing power to OpenAI for AI operations.

Chipmakers including Nvidia, Broadcom and Advanced Micro Devices declined between roughly 2% and 5%.

Qualcomm pulled back 3.5%. The stock had gotten a slight boost Monday on reports it is working with OpenAI on smartphone chips tied to the firm's hardware ambitions. Leveraged neocloud stock CoreWeave dropped 7%.

In Asia, SoftBank Group, one of OpenAI's largest investors, sank about 10%. Read more.

Check out the companies making headlines before the bell:

UPS shares were down more than 3% after the company's latest quarterly figures and guidance failed to impress investors. The company posted adjusted earnings per share of $1.07 on revenue of $21.2 billion. Analysts polled by LSEG expected a profit of $1.02 per share on revenue of $20.99 billion.

General Motors traded more than 4% higher after the automaker reported a Q1 earnings beat and raised its 2026 guidance. The company earned an adjusted $3.70 per share, topping an LSEG forecast of $2.62 per share. For 2026, GM sees EBITDA of $13.5 billion to $15.5 billion. That's up $500 million from a previous guidance.

The Stoxx 600 moved into positive territory on Tuesday as investors digested a raft of earnings updates from several major European corporates.

The pan-European benchmark had risen almost 0.2% by 10:30 a.m. in London (5:30 a.m. E.T.), as bourses in London, Paris, Frankfurt and Milan all made gains.

Regional sectors were also largely positive.

Oil and gas names led with a 1.8% rise after energy prices rose again on Monday, while bank stocks advanced more than 1.1% ahead of a slew of earnings updates from regional lenders this week.

In a busy day for European corporate results, U.K. energy major BP, Swiss drugmaker Novartis, and British bank Barclays were among those publishing quarterly updates.

Asia-Pacific closed mostly lower Tuesday as investors weighed developments in U.S.-Iran negotiations.

U.S. President Donald Trump and his national security team on Monday discussed Iran's reported offer to reopen the Strait of Hormuz, contingent on the U.S. lifting its blockade and ending the conflict, according to White House press secretary Karoline Leavitt.

Japan's Nikkei 225 declined 1.02% to close at 59,917.46 after notching a record high on Monday, while the Topix added 0.99% to 3,772.19. South Korea's Kospi rose 0.39% to 6,641.02 while the small-cap Kosdaq declined 0.86% to 1,215.58.

Japan's central bank kept its policy rate steady at 0.75% on Tuesday, while revising its inflation estimates upwards as the Iran war raises supply-side risks.

In Australia, the S&P/ASX 200 lost 0.64% to 8,710.7.

Hong Kong's Hang Seng index lost 0.48% as of its last hour of trade, while mainland China's CSI 300 declined 0.27% to 4,758.21.

Japan's central bank kept its policy rate steady at 0.75% on Tuesday, while revising its inflation estimates upwards as the Iran war raises supply-side risks.

The decision to keep rates steady came in a split 6-3 vote, and was in line with Reuters-polled analysts' estimates. The dissenting members proposed to raise the policy rate to 1%, arguing that tensions in the Middle East had skewed price risks to the upside.

The Bank of Japan also cut its growth forecast for the fiscal year 2026 to 0.5% from 1%, and sharply raised its core inflation outlook to 2.8% from 1.9%. The BOJ has set its headline inflation target at 2%.

Stocks reporting before Tuesday's opening bell include:

On the other hand, stocks reporting after Tuesday's closing bell include:

— Lisa Kailai Han and Robert Hum

These are the stocks moving the most in extended-hours trading:

Read the full list of stocks moving here.

Stock futures traded near flat on Monday night.

Shortly after 6 p.m. ET, futures tied to all three major averages were trading around the flatline.