Wall Street hit by slumping AI stocks and rising oil prices; ASX set to fall
Stan Choe
Updated ,first published
AI stocks falling due to the Iran war and another rise in oil prices helped Wall Street pull back from record highs on Tuesday.
The S&P 500 is down 0.5 percent from its all-time high. The Dow Jones Industrial Average fell 25 points, or 0.1 percent, while the Nasdaq composite fell 0.9 percent from its own record.
The Australian share market is poised for a decline, with futures pointing to a loss of 33 points, or 0.4 per cent, at the open at 4.56pm AEST. The ASX lost 0.6 per cent on Tuesday. The Australian dollar was trading at 71.85¢. The Australian Bureau of Statistics will publish its consumer price index for March on Wednesday and analysts agree that an oil-led rise in prices will reduce the overall inflation rate. towards 5 percent.
Artificial intelligence sector stocks led the decline on Wall Street. Chip company Broadcom has the S&P 500’s heaviest weight after falling 4.4 percent. The declines of 1.6 percent for Nvidia and 3.9 percent for Micron Technology also negatively affected the market.
The weakness came after a report Wall StreetJournal He said some leaders at OpenAI are concerned about new users and whether they can support big spending on data centers after missing revenue targets. If ChatGPT’s maker withdraws its investments, it could strengthen criticism that the entire AI industry is in an overspending bubble that may not generate profits and productivity worth it. Elsewhere, Elon Musk’s blockbuster civil trial has begun in California.
The declines come just a day before several of the biggest spenders on artificial intelligence are scheduled to report their latest results for early 2026. These declines could offer more clues about whether all investments in AI are producing the kind of returns that shareholders care about.
Alphabet, Amazon, Meta Platforms and Microsoft report their latest quarterly results on Wednesday.
Another increase in oil prices weighed on the stock market as uncertainty continued about what would happen in the Iran war.
The price of a barrel of Brent crude oil to be delivered in June increased by 2.8 percent to $111.26. Brent, which will be delivered in July, when there is more trading in the oil market, increased by 2.7 percent to $104.40.
Brent prices are approaching their peak of US$119, when war-related concerns peaked, after remaining around US$70 at the end of February.
The focus is on the Strait of Hormuz, which has effectively been shut down, leaving oil tankers stuck in the Persian Gulf instead of going to customers around the world. The Trump administration appeared unlikely on Tuesday to accept Iran’s offer to reopen the Strait of Hormuz if the United States lifts its blockade of the country.
The proposal would postpone discussions on the Islamic Republic’s nuclear program; US Secretary of State Marco Rubio ruled out this possibility in an interview with Fox News on Monday.
Meanwhile, the United Arab Emirates said it would leave OPEC from May 1, stripping the oil cartel of its third-largest producer and further weakening its influence over global oil supplies and prices.
The UAE’s decision has been rumored as a possibility for some time, as it has pushed back against OPEC production quotas in recent years, which it considers to be too low; This meant that it could not sell as much oil to the world as it wanted.
Meanwhile, the average price of a gallon of gasoline in the U.S. hit $4.18 on Tuesday, the highest since 2022, according to auto club AAA.
Expensive fuel was one of the reasons why JetBlue Airways reported a worse loss than analysts expected at the beginning of 2026.
But its shares still rose 1.2 per cent after chief executive Joanna Geraghty said the airline had seen demand from customers strengthen over the quarter. JetBlue also announced moves to rein in fuel costs, such as reducing some of its flights.
Another stock that helped limit Wall Street’s losses was Coca-Cola’s. It rose 3.9 percent in the latest quarter after a stronger profit and revenue report than analysts expected, thanks in part to strength from China, the United States and India.
Overall, the S&P 500 fell 35.11 points to 7,138.80 points. The Dow Jones Industrial Average fell 25.86 to 49,141.93, and the Nasdaq composite index fell 223.30 to 24,663.80.
In the bond market, Treasury yields remained relatively stable following a report showing U.S. consumers were feeling slightly more confident in April, when economists had expected to see a decline. The yield on the 10-year Treasury note remained at 4.35 percent late Monday.
On Wednesday, the Federal Reserve will announce its final decision on short-term interest rates. The widespread expectation is that he will keep the federal funds rate steady and delay resuming cuts. Low interest rates can help the economy, but they also run the risk of worsening inflation when oil is expensive and tariffs threaten to push prices even higher.
Also Wednesday, the Senate Banking Committee will vote on whether President Donald Trump’s nominee, Kevin Warsh, will replace Fed Chairman Jerome Powell. The committee is expected to confirm Warsh and send his nomination to the full Senate.
Indices on stock markets abroad fell across much of Europe and Asia.
Japan’s Nikkei 225 Index fell 1 percent, one of the world’s biggest losses, after the Bank of Japan decided to leave its key interest rate unchanged by a split vote.
“There are various risks in view,” the statement said. “For now, it is necessary to pay particular attention to the impact of the future course of the situation in the Middle East.”
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