Closing Bell: OpenAI Worries Pressure Stocks Ahead of Fed Decision

Key Points

• U.S. equities pulled back, with defensive sectors leading as investors rotated away from growth; Technology and cyclicals underperformed while Energy, Real Estate, and Consumer Staples outperformed.
• Seagate surged after delivering a Q3 earnings and revenue beat driven by AI-related storage demand, record margins, and a strong Q4 outlook, supported by debt reduction and shareholder returns.
• Reports that OpenAI missed key sales and user growth targets pressured sentiment across the AI complex, weighing on closely linked stocks such as SoftBank, Oracle, CoreWeave, and AMD amid rising concerns over competition and future AI spending.

U.S. equities pulled back modestly, with the S&P 500 falling 0.46% and the Nasdaq‑100 sliding 1.01%, while the Russell 2000 underperformed with a 1.15% decline. Defensive sectors led the tape, as Energy, Real Estate, and Consumer Staples outperformed, while Information Technology, Materials, and Industrials lagged.

Seagate Surges as AI Demand Fuels Q3 Beat and Strong Q4 Outlook

Seagate (STX) delivered a strong fiscal Q3, topping revenue and earnings expectations as accelerating AI adoption drove sustained demand for mass-capacity storage and pushed margins to record levels. The company paired solid operational execution with balance-sheet improvement, retiring $641 million in debt and returning capital to shareholders. Looking ahead, Seagate issued an upbeat Q4 outlook well above Wall Street estimates, citing continued AI-driven data growth and minimal expected impact from tariffs or Middle East-related disruptions, sending shares sharply higher after the report.

OpenAI Misses Growth Targets, Pressuring AI Trade and Partner Stocks

OpenAI missed key sales and user growth benchmarks this year, according to a Wall Street Journal report, raising fresh doubts about the pace of revenue expansion amid intensifying competition in the AI market. The report said gains by rivals such as Anthropic—and growing momentum behind Google’s Gemini—have pressured OpenAI’s position in enterprise and coding use cases, even as internal debate emerged around cost discipline and future compute spending. Although OpenAI leadership publicly dismissed any notion of internal rifts, the news weighed on investor sentiment, dragging down closely tied stocks like SoftBank, Oracle, CoreWeave, and AMD, which had previously surged on optimism around the AI buildout.

Economic Data for Tomorrow (ET)

• 8:30am
• Building Permits
• Core Durable Goods Orders
• Durable Goods Orders
• Goods Trade Balance
• Housing Starts
• Preliminary Wholesale Inventories
• Building Permits (February data)
• Housing Starts (February data)
• 10:30am
• Crude Oil Inventories
• 2:00pm
• Federal Funds Rate
• FOMC Statement
• 2:30pm
• FOMC Press Conference

Earnings Calendar

Before Market Open: ABBV, AER, APH, AZN, ADP, AVTR, CAR, AVT, BLCO, BIIB, EAT, BG, CNI, CTSH, DAN, DK, ETR, ETSY, GRMN, GEHC, GNRC, GD, GSK, HUM, JKS, LII, LAD, PSN, PSX, REGN, SMG, SOFI, SWK, TEVA, TW, VIRT, VMC, WING, YUM

After Market Close: AFL, ALGN, ALL, GOOGL, AMZN, AWK, AR, BHC, CHRW, CWH, CP, CVNA, CAKE, CMG, EBAY, FLS, F, FTAI, GFL, KGC, KLAC, MAT, META, MGM, MSFT, ORLY, PPC, QCOM, SBAC, SFM, TDOC, TYL, WWD, WH

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