Sinking AI stocks and rising oil prices weigh on Wall Street

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Wall Street slipped off record highs on Tuesday as sinking shares in artificial-intelligence-related companies and rising oil prices weighed on investors’ sentiment. The S&P 500 fell 0.5% from its latest all-time high, while the Nasdaq Composite dropped 0.9% from its own record and the Dow Jones Industrial Average fell 0.1%, extending pressure into Tuesday’s trading.

Stocks tied to the artificial-intelligence industry were among the biggest drags. Broadcom fell 4.4%, Nvidia slid 1.6%, and Micron Technology dropped 3.9%, according to the AP report. The broader weakness came after a Wall Street Journal report that some leaders at OpenAI were concerned about whether the company can support its spending on data centers after missing targets for new users and revenue.

Markets have also been watching what any pullback by OpenAI could signal for the entire sector. If OpenAI were to reduce investment, it could bolster criticism that the AI industry is in a “bubble” of spending that may not generate the profits and productivity investors expect, the AP report said.

Oil rose again on Tuesday, adding to uncertainty linked to the Iran war. Brent crude for June climbed 2.8% to settle at $111.26, while Brent for July rose 2.7% to settle at $104.40. The AP report said Brent had traded around $70 in late February and has moved closer to its peak of $119 reached when worries about the war were at their highest.

Attention has focused on the Strait of Hormuz and how disruptions could affect shipping routes. The AP report said the effective closure of the waterway has been keeping oil tankers stuck in the Persian Gulf instead of heading to customers worldwide, and it noted that the Trump administration appeared unlikely to accept Iran’s offer to reopen the strait if the U.S. lifts its blockade. The report said the proposal would postpone discussions on Iran’s nuclear program, a step U.S. Secretary of State Marco Rubio appeared to rule out in a Fox News interview Monday.

Beyond stocks and oil, higher fuel costs were also part of the market backdrop. The AP report said the average price for a gallon of gasoline in the United States reached $4.18 on Tuesday, the most since 2022, according to AAA. JetBlue Airways reported a worse-than-expected loss for the start of 2026, but its shares rose 1.2% after CEO Joanna Geraghty said the airline saw demand strengthening through the quarter; the company also announced moves to rein in fuel costs, including cutting some flying.

Coca-Cola’s shares helped limit losses on Tuesday. The AP report said Coca-Cola rallied 3.9% after reporting stronger profit and revenue than analysts expected for the latest quarter, citing strength from China, the United States and India.

By the end of the session described in the AP report, the S&P 500 fell 35.11 points to 7,138.80, the Dow dropped 25.86 points to 49,141.93, and the Nasdaq Composite sank 223.30 points to 24,663.80. In the bond market, Treasury yields held relatively steady after a report showed U.S. consumers were feeling slightly more confident in April than economists had expected, with the 10-year Treasury yield remaining at 4.35% where it was late Monday, the report said.

Looking to Wednesday, investors were set for the Federal Reserve’s decision on short-term interest rates. The AP report said expectations were that the Fed would hold the federal funds rate steady and delay any resumption of cuts, while noting that lower rates could help the economy but also could worsen inflation pressures when oil is expensive and tariffs are threatening to push prices higher.

The AP report also said the Senate Banking Committee planned to vote Wednesday on whether to confirm President Donald Trump’s nominee, Kevin Warsh, to succeed Fed Chair Jerome Powell. The committee was expected to approve Warsh and send his nomination to the full Senate.

In markets abroad, indexes fell across much of Europe and Asia. Japan’s Nikkei 225 sank 1% after the Bank of Japan opted in a split vote to keep its key interest rate unchanged, and the bank said in a statement that “there are various risks to the outlook,” adding that “for the time being it is necessary to pay particular attention to the impact of the future course of the situation in the Middle East.”