OpenAI Revenue Slip Weighs on Tech Stocks

Summary

Tech stocks came under pressure after OpenAI reportedly told investors its September annualised revenue was almost $50 billion, below earlier signals. In Australia, data centre operator Firmus shelved its $5 billion IPO for a private fundraising. SpaceX, Broadcom and Oracle are expected to raise billions for AI chips, as Morgan Stanley estimates AI infrastructure needs $1.5 trillion in financing by 2028. Brent held above $100 while euro zone ministers and the ECB urged France to pass a 2027 budget.

Equities

The FTSE 100 fell 0.2% late on Thursday after touching its lowest level in more than three months during the session, as banks and healthcare stocks led declines. The FTSE 250 fell 0.4%, while a global bond selloff pushed the 10-year gilt yield to a 19-year high of 5.527%.

BP and Shell rose 4% and 3.6% respectively at the close, lifting energy stocks 3.7% to a record high as Brent crude climbed above $104 a barrel. Attacks on shipping in the Strait of Hormuz and hurricane disruption to US output drove oil higher.

HSBC and Standard Chartered each fell about 2% on Thursday, while Lloyds lost 1.6%, as banks dropped 1.8%. Healthcare stocks fell 2.2%, their biggest one-day fall in over two months.

Tesco rose 5.2% to top the FTSE 100 on Thursday after the supermarket raised its 2026/27 profit forecast to between £3.15 billion and £3.3 billion. Imperial Brands gained 5.1% after saying it was on track to meet full-year guidance and launching a new £1.5 billion share buyback. Standard Life fell 3.8% after Aberdeen sold 52 million shares, halving its stake.

US stocks were mixed late on Thursday, with the Nasdaq falling 1.25% to 27,193.34 and the S&P 500 losing 0.47% to 7,765.36, while the Dow edged up 0.1% to 51,231.64. The Nasdaq’s fall came two days after it set a record closing high.

Chip stocks fell 3.4% after a Financial Times report that OpenAI’s annualised revenue was $20 billion lower than the company had previously signalled. Oracle fell 5.5%, Micron 4.8% and Broadcom 4.4% at the close, after reports on Wednesday that Broadcom is lining up $50 billion in financing for OpenAI.

Chipotle Mexican Grill jumped 6.2% on reports that Starbucks is exploring a takeover, while Starbucks slipped 0.4%. PepsiCo rose 3.7% after announcing further cost cuts alongside a lower annual core profit forecast, and Palantir gained 2.4% after a Goldman Sachs upgrade to “buy”.

Forex & Commodities

The US dollar was softer early this morning, taking a breather from its recent rally. The pause made dollar-priced commodities cheaper for holders of other currencies.

St Louis Fed President Alberto Musalem said the Federal Reserve will need to raise rates again to bring inflation back to its 2% target, although he declined to say what policymakers should do at their meeting later this month. The comments follow September’s unanimous decision to raise rates by a quarter of a percentage point.

Spot gold rose 1.4% early this morning to $4,191 an ounce after falling to a two-month low on Wednesday, putting it on course for a weekly gain. A softer dollar and lower oil prices supported bullion, while markets continued to weigh the likelihood of another Fed rate increase. Traders were pricing a 17% chance of an October hike and an 83% probability of a December increase.

Silver was up early this morning at $60.22, while platinum rose to $1,678 and palladium climbed to $1,160.

Oil prices fell early this morning as concerns over Middle East supply eased after President Trump said late on Thursday that the US would not attack Iran before the November 3 midterm elections. Brent crude was down at $102.9 a barrel, while WTI fell to $90.40. Brent remains on track for a weekly gain after closing 4% higher on Thursday.

Iran said it is reviewing the US response to its proposal to reopen the Strait of Hormuz within seven days. The US imposed fresh sanctions on Thursday targeting individuals, networks and 17 vessels carrying Iranian crude, oil products and petrochemicals.

US Gulf producers had shut in 62.94% of oil output, around 1.3 million barrels a day, as of Thursday because of Hurricane Isaias. The International Energy Agency also agreed this week to speed up the release of oil stocks and prioritise diesel supplies.