The pAIn trade strikes
QQQ•US technology and AI stocks fell on Thursday as concerns about AI profitability intensified; the Nasdaq dropped 1.3%, the S&P 500 fell 0.5% and the Dow was flat. Oil rose 4%, while long-term US Treasury yields fell by as much as 6 basis points.
1. AI stocks retreat
US technology and AI stocks sank as investors weighed concerns about the profitability of the AI buildout. A report put OpenAI's annualized revenue at $20 billion below the $70 billion previously signaled; the article said differences in how OpenAI and Anthropic book revenue help explain the discrepancy.
2. Markets and bonds
The Nasdaq fell 1.3%, its biggest decline in nearly two months, while the S&P 500 lost 0.5% and the Dow was flat. Chip stocks fell 4%; Nvidia dropped 3%, while Intel and Oracle each lost 5.5%. Oil rose 4%. Long-term US Treasury yields fell by as much as 6 basis points after a strong 30-year bond auction, which cleared at 5.618% with a bid-to-cover ratio of 2.54.
3. Tariffs and prices
A New York Fed paper found that tariffs had added nearly 3 percentage points to US goods-price inflation as of February. The article said the tariff pass-through has likely faded and that its contribution to inflation is expected to be negative through the middle of next year.
