AI Rally Pauses as Oil Surges Past $110: Rising Anxiety on Wall Street

On the 28th (local time), New York’s major stock indexes paused near record highs. The S&P 500 slipped 0.5% to 7,138.80, the Dow Jones Industrial Average edged down 0.1% to 49,141.93, and the Nasdaq Composite fell 0.9% to 24,663.80. The small-cap Russell 2000 also dropped 1.2%, reflecting broadly heavier selling across risk assets.

Leading the pullback were AI- and semiconductor-related stocks. After the Wall Street Journal reported that OpenAI fell short of its user and revenue targets, Broadcom plunged 4.4%, while other top AI beneficiaries—including Nvidia and Micron—lost between 1% and 3%. Profit-taking after an 18-session rally further fueled renewed debate over whether the AI sector is overheated or in a bubble.

Economic data, by contrast, remained fairly stable. The Conference Board’s Consumer Confidence Index rose modestly to 92.8 in April from 92.2 in March, defying forecasts of a slowdown. U.S. Treasury yields traded in a narrow range, as investors awaited the Federal Open Market Committee meeting on April 29 to see if policymakers would keep the benchmark interest rate at 3.50%–3.75% and to monitor the Senate confirmation process for Fed Chair nominee Kevin Warsh.

On the global front, the prolonged conflict in Iran, a blockade of the Strait of Hormuz, and the United Arab Emirates’ announcement that it will leave OPEC drove June Brent crude futures up more than 2% to about $111 per barrel. U.S. gasoline prices hit a post-2022 high of $4.18 per gallon, underpinning strength in energy stocks even as high-growth and domestic-focused names lagged, underscoring clear sector divergences.