Key Takeaways

• Mixed futures: S&P 500 futures fell 0.6%, Nasdaq 100 futures slid 1.2%, while Dow futures rose 0.3% as markets digested fresh headwinds.
• Trump rebuffs Iran offer: The president is reportedly displeased with Tehran’s proposal to reopen the Strait of Hormuz while postponing nuclear talks — a deal-breaker given his focus on dismantling Iran’s nuclear ambitions.
• Hormuz still shut: The vital waterway carrying roughly a fifth of global oil supplies remains effectively closed, with Brent crude climbing further above pre-war levels.
• OpenAI shock: The AI giant reportedly missed internal user and revenue targets, with CFO Sarah Friar voicing concern about funding future data center contracts ahead of a planned IPO.
• Tech ripple effect: Oracle and CoreWeave each tumbled around 7%, while Microsoft, Nvidia, and SoftBank (down nearly 10% in Tokyo) all slid on the news.
• Earnings deluge: Around 35% of S&P 500 firms report this week, with tech giants in focus for AI investment guidance.
• Stock movers: GM lifted guidance after a $500 million tariff refund but slipped 1%; Kimberly-Clark and Coca-Cola rose on solid results; UPS, Hilton, and Spotify all declined.
• Fed on deck: Markets brace for Wednesday’s Fed decision, where rates are widely expected to remain on hold.

U.S. stock futures largely retreated on Tuesday as President Donald Trump weighs Iran’s latest peace overture and artificial intelligence stocks come under pressure amid mounting concerns surrounding industry powerhouse OpenAI.

At 08:52 ET (12:52 GMT), S&P 500 futures were down 0.6% and Nasdaq 100 futures had slid 1.2%. Dow futures, by contrast, edged 0.3% higher.

The benchmark S&P 500 and tech-heavy Nasdaq Composite both advanced in the previous session, notching fresh all-time highs, while the blue-chip Dow Jones Industrial Average finished lower.

Trump Cool on Iran’s Latest Offer

Media reports indicated that Trump was unimpressed with an Iranian proposal that would bring an end to the conflict and reopen the Strait of Hormuz, but defer discussions around Tehran’s nuclear ambitions to a later stage.

Trump has repeatedly stated that dismantling Iran’s nuclear capabilities — particularly its potential pathway to a nuclear weapon — has been a central driver of the joint U.S.-Israeli campaign launched in late February. For that reason, Trump was unhappy with the proposal, Reuters reported, citing a U.S. official briefed on the matter.

Hopes for a revival of peace negotiations between Washington and Tehran were dealt a blow over the weekend when Trump called off plans to dispatch his negotiators to Pakistan for a fresh round of talks.

Amid the diplomatic back-and-forth, the Strait of Hormuz remains nearly closed to shipping traffic. The narrow waterway off Iran’s southern coast — a critical chokepoint through which roughly a fifth of the world’s oil flows — has been effectively shut down for weeks, fueling a sharp climb in oil prices well above pre-war levels.

Concerns are growing that an energy shock could ignite a global surge in inflationary pressures, potentially forcing central banks to push interest rates higher in response. Brent crude futures, the global benchmark, climbed once again on Tuesday.

OpenAI Stumbles Cast Cloud Over AI Trade

OpenAI recently fell short of its own targets for new users and revenue, according to a Wall Street Journal report — sparking concerns over how the AI startup will sustain its enormous spending commitments.

The company missed an internal goal of reaching one billion weekly active users for its ChatGPT bot by the end of 2025, the WSJ reported, citing people familiar with the matter. It also fell short of multiple monthly revenue targets earlier this year.

CFO Sarah Friar reportedly told fellow executives that she was worried the company might not be able to fund future data center contracts unless revenue accelerates more quickly, according to the report. OpenAI’s board directors were also scrutinizing the company’s recent data center deals and questioning CEO Sam Altman’s push to lock in even more computing power despite the softening revenue picture, the WSJ added.

The worries over OpenAI’s revenue trajectory and spending plans come as the AI startup races toward an initial public offering, which is expected to take place by the end of the year. Friar and other senior executives are now reportedly working to tighten cost controls and inject greater business discipline into operations.

The news rippled through companies with ties to OpenAI. Oracle — OpenAI’s largest cloud computing provider — tumbled nearly 7%, while peer CoreWeave fell over 7%. Larger partners Microsoft and Nvidia also moved lower, and Japanese conglomerate SoftBank Group, which has committed to enormous investments in OpenAI, plunged almost 10% during Tokyo trading.

In a research note, analysts at Vital Knowledge said the market mood was “somber,” pointing to the slide in AI stocks, the jump in oil prices, and a “hawkish” rate hold from the Bank of Japan.

Earnings Tsunami Hits Wall Street

Beyond the diplomatic turbulence between the U.S. and Iran, investors were gearing up for the busiest week of the quarterly earnings season, with roughly 35% of S&P 500 companies scheduled to report.

The headline acts of the earnings parade will be a string of tech sector giants, whose results could deliver crucial insight into their plans for massive AI infrastructure investments. Those capital expenditures have helped shield markets from the headwinds posed by weeks of geopolitical turmoil and a deepening energy shock.

On Tuesday’s docket, General Motors lifted its full-year guidance and posted better-than-expected first-quarter results after a U.S. Supreme Court ruling to terminate Trump’s aggressive tariffs led to roughly a $500 million refund. Even so, shares of the automaker were nearly 1% lower ahead of the opening bell.

Kimberly-Clark ticked up 1% after the U.S. personal care products manufacturer’s first-quarter sales topped estimates, while a bright annual forecast from Coca-Cola lifted shares of the beverage giant.

UPS fell after the company posted a 28% slide in quarterly adjusted profit following a move to scale back deliveries for key client Amazon.

Hotel chain Hilton’s shares declined after its first-quarter results, while music streaming service Spotify also moved lower.

Elsewhere, markets are bracing for the conclusion of the Federal Reserve’s two-day policy meeting on Wednesday. Fed officials are widely expected to leave interest rates unchanged, though commentary from Chair Jerome Powell could offer crucial clues about the central bank’s future policy direction.