The S&P 500 and Nasdaq Composite closed lower for a second straight day Thursday as market participants worried about lofty Treasury yields and spiking oil prices. A sell-off across the technology sector didn’t help, with several mega-cap names falling on OpenAI’s worrisome revenue update.
At the close, the broader S&P 500 was off 0.5% at 7,765, and the tech-heavy Nasdaq was 1.3% lower at 27,193. Despite back-to-back losses, the two benchmarks remain near the record highs they hit earlier this week.
The blue-chip Dow Jones Industrial Average eked out a 0.1% gain to 51,231 on strength in Chevron (CVX, +3.2%) and Home Depot (HD, +3.4%).
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Treasury yields eased back Thursday, but remain near their highest levels in years. The yield on the 2-year Treasury fell 1.1 basis points to 4.753% and the yield on the 10-year Treasury declined 5 basis points to 5.227%. The 30-year Treasury yield hit a fresh 24-year peak in intraday trading, but closed down 5.9 basis points at 5.602%.
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Front-month West Texas Intermediate crude futures, meanwhile, climbed to 3.6% to $91.49 per barrel after several media reports suggested the Trump administration was considering large-scale military operations against Iran. An early afternoon Truth Social post from President Donald Trump said the U.S. will not attack Iran ahead of the midterm elections, which brought futures off their intraday highs.
Oil prices are down more than 13% from their mid-September peak near $105, but are up roughly 1% so far in October.
OpenAI’s $20 billion revenue shortfall weighs on tech stocks
Tech stocks slumped Thursday after a report in the Financial Times indicated that OpenAI’s annualized revenue was $50 billion — $20 billion below what was previously reported.
According to the article, the metric “is the most important indicator of overall demand for AI,” and helps support massive infrastructure spending. While the $50 billion figure reported by FT still represents impressive growth from 2025, the discrepancy was enough to spook investors who are worried about an AI spending slowdown.
The news also caused several mega-cap AI stocks to sell off, with Nvidia (NVDA, -2.9%), Advanced Micro Devices (AMD, -3.9%) and Micron Technology (MU, -4.8%) all closing lower.
Chipotle soars on Starbucks takeover chatter
Chipotle Mexican Grill (CMG) was one of the best S&P 500 stocks Thursday, gaining 6.2%, after a separate Financial Times report said Starbucks (SBUX, -0.4%) is considering buying the $42 billion burrito chain.
While D.A. Davidson analyst Matt Curtis says the odds of a megadeal between the two parties are “relatively low,” it would combine two of the country’s largest restaurant chains.
Starbucks is the second-largest public restaurant chain by sales in the U.S., while Chipotle is the seventh-largest. It would also reunite Starbucks CEO Brian Niccol with his former employer. Niccol served as chief executive at Chipotle from 2018 through 2024.
PepsiCo gains after earnings
Over on the earnings calendar, PepsiCo (PEP) climbed 3.7% after the soda pop and snack maker reported its fiscal third-quarter results.
For the three months ending September 5, Pepsi said earnings rose 2% year over year to $2.34 per share, while revenue was up 5.6% to $25.3 billion.
However, the company lowered its full-year earnings-per-share forecast, now expecting bottom-line growth of 2.5% to 3.5% vs the 5% to 7% it previously guided for.