Wall Street Ends Lower on AI Growth Slowdown Concerns

Concerns that artificial intelligence (AI) technology development may be slower than expected halted the upward trend in the New York stock market. On the 28th (local time), the Dow Jones Industrial Average closed at 40,9141.93 on the New York Stock Exchange, down 25.86 points (0.05%) from the previous day. The S&P 500 index closed down 35.11 points (0.49%) at 7138.80, and the Nasdaq Composite, which includes many tech company stocks, finished the session down 223.30 points (0.90%) at 24,663.80. The market, which had recently continued its strong performance by setting new record highs, turned downward as investor sentiment contracted on news of slowing growth at OpenAI, a leading privately held generative AI company.

The Wall Street Journal reported that OpenAI is experiencing a slowdown in its weekly user growth and revenue growth. In response, Oracle's stock, which is highly dependent on OpenAI, fell 4.05%. The Philadelphia Semiconductor Index dropped 3.58%, and major semiconductor stocks including Nvidia (-1.59%), TSMC ADR (-3.12%), Broadcom (-4.39%), Micron (-3.96%), ASML ADR (-3.34%), AMD (-3.41%), and Intel (-0.55%) all showed weakness. Among the Magnificent 7 (M7) stocks, Nvidia (-1.59%), Amazon (-0.54%), Alphabet (-0.16%), Meta (-1.07%), and Tesla (-0.70%) declined. Apple (1.16%) and Microsoft (1.04%) rose, partially offsetting the losses.

Investors engaged in some profit-taking ahead of major hyperscaler earnings reports. This week, Alphabet, Microsoft, Amazon, and Meta are scheduled to release their quarterly earnings on the 29th, and Apple on the 30th. These companies account for approximately 44% of the total S&P 500 market capitalization.

International oil prices rose. Despite the United Arab Emirates' (UAE) declaration to withdraw from OPEC and OPEC+ starting next month, concerns over the opening of the Strait of Hormuz had a greater impact. June WTI crude futures closed up $3.56 (3.7%) at $99.93 per barrel. Although Iran proposed last weekend to negotiate its nuclear program on the condition of a complete ceasefire and the opening of the Strait of Hormuz, U.S. President Donald Trump expressed dissatisfaction with the proposal. Reports indicated that vessel operations in the Strait of Hormuz, through which approximately 20% of the world's oil and LNG supply passes, are currently facing disruptions due to the conflict between Iran and the United States.

In individual stock movements on the day, General Motors (GM) shares rose 1.3%, and Coca-Cola shares increased by 3.9%. Conversely, UPS shares fell 4.0%. European stocks mostly closed lower. The pan-European STOXX 600 index closed down 0.37% at 606.58. Germany's DAX index and France's CAC index also declined, while the UK's FTSE index saw a slight increase.