US stocks saw mixed performance on October 8 Eastern Time, with the Dow Jones Industrial Average barely managing a gain thanks to support from energy and defensive sectors, while the Nasdaq fell sharply after OpenAI's annualized revenue figures came in below expectations, with AI and semiconductor stocks serving as the main drag.
Markets are once again questioning the payback timeline for massive AI capital expenditures, and there is a clear rotation of funds from high-valuation tech stocks into utilities, energy, and some consumer defensive sectors.
At the close, the Dow Jones Industrial Average rose 0.10%, the Nasdaq Composite fell 1.25%, and the S&P 500 dropped 0.47%.
Treasury yields rose initially before falling back. The 10-year Treasury yield climbed to about 5.35% during the session before retreating to around 5.23%, while the 30-year Treasury yield dropped from about 5.73% to roughly 5.60%.
Solid demand at the US Treasury's 30-year bond auction helped drive bond prices higher, easing some market pressure. Federal Reserve Governor Waller said further rate hikes may still be needed in the future, but the timing is flexible and there is no need to raise rates at every meeting.
St. Louis Fed President Alberto Musalem said rates may need to be raised further over the next 6 to 9 months.
OpenAI Revenue Data Spooks the Market; Semiconductors and AI Infrastructure Hit Hard
On October 8 Eastern Time, US semiconductor and AI infrastructure stocks suffered heavy losses. The Philadelphia Semiconductor Index fell 3.39%, AMD dropped 3.90%, Intel declined 5.34%, and Micron Technology lost more than 4%.
Optical communications stocks were also hammered, with Applied Optoelectronics plunging 13.58%, Coherent falling 9.63%, and Lumentum dropping 5.62%.
The core catalyst behind the selloff was OpenAI's latest revenue data. According to multiple reports, OpenAI said its annualized revenue through the end of September was close to $50 billion, roughly $20 billion below the level it had previously signaled to the market.
This "revenue expectation revision" has prompted investors to reassess the payback timeline for the massive capital expenditures across the AI supply chain.
Oracle Plunges More Than 5%
Amid reports of high data center construction costs and the above shock, Oracle's stock price fell sharply during the session and closed down 5.48%.
Apple Defies the Trend to Rise
Apple was the only bright spot among the "Magnificent Seven" tech giants, gaining 1.11% to close at $340.42 per share.
The market is looking forward to Apple's upcoming event on October 13, and the company's appointment of a new head of mergers and acquisitions under its new CEO is seen as a positive signal.
Oil Price Surge Drives Energy Stocks Higher
A sharp rise in oil prices lifted energy stocks. Chevron rose 3.15%.
An attack on shipping in the Strait of Hormuz, combined with hurricanes affecting US oil production, raised concerns about supply disruptions. Brent crude surged 4.07% to $104.28 per barrel. As of press time, Brent crude was at $104.13 per barrel.