U.S. stocks closed mostly lower on Friday, June 26, as a report that OpenAI may push its IPO to 2027 added fresh fuel to an already smoldering tech selloff. The news raised uncomfortable questions about the durability of AI spending — the theme that has driven much of the market’s gains over the past two years — and sent semiconductor and cloud-adjacent names sliding for a fifth consecutive session. Defensive and consumer-facing stocks held up better, pointing to a rotation rather than an all-out retreat.
What Moved Markets
The Dow Jones Industrial Average shed 44.51 points, or 0.09%, to close at 51,876.11, effectively flat as its more economically diversified holdings cushioned the blow. The S&P 500 fell 0.05% to settle at 7,354.02, a nearly imperceptible decline that masked sharp divergence underneath the surface. The Nasdaq Composite dropped 0.24% to 25,297.62, extending a five-day losing streak driven almost entirely by weakness in large-cap technology.
The proximate cause was a Bloomberg report indicating that OpenAI, the maker of ChatGPT, is leaning toward delaying its long-anticipated IPO until 2027. The company’s advisors reportedly presented two options — go public now at a reduced valuation, or wait and chase a $1 trillion target — and CEO Sam Altman is said to have rejected any price cut. OpenAI’s recently disclosed audited financials revealed a $38.5 billion net loss last year, driven by a $34 billion spending spree on compute and R&D, raising doubts about how quickly the company can generate the kind of returns investors expect from a trillion-dollar enterprise.
For markets, the deeper concern is what a delay signals about AI economics. If one of the largest buyers of chips and cloud capacity is pulling back from public scrutiny, some investors are asking whether the promised wave of AI-driven revenue is arriving on schedule — or whether the buildout has gotten ahead of the returns.
Notable Movers
Nvidia (NVDA) dropped roughly 1.5%, settling near $195.74. As the clearest proxy for AI hardware spending, Nvidia has become a lightning rod for any headline that questions the pace of data center investment. Five straight sessions of losses have erased a meaningful slice of the gains it posted earlier this year.
Micron Technology (MU) and Sandisk each fell around 5%, among the biggest single-day losers in the semiconductor space. Despite Micron’s blowout fiscal third-quarter earnings earlier in the week, the broader chip-stock selloff overwhelmed any positive momentum, as macro concerns about AI capital expenditure trumped strong individual results.
SoftBank Group saw its shares tumble more than 12% — the steepest one-day drop since August 2024 — after the OpenAI IPO delay report hit wires. SoftBank has made a massive bet on OpenAI’s success, and a delayed public market debut pushes back the timeline on any return on that investment.
Eli Lilly (LLY) was a standout gainer, surging roughly 7% after European regulators approved its leukemia therapy. The move underscored a broader rotation into healthcare and pharmaceutical names as investors sought refuge from tech volatility.
Visa (V) and Walmart (WMT) each added more than 2%, benefiting from the same defensive rotation. With consumers continuing to spend even as tech-sector confidence wobbles, payment processors and large-format retailers attracted buyers looking for steadier ground.
Looking Ahead
Next week, investors will be watching whether the tech selloff finds a floor or continues to broaden. The Federal Reserve’s preferred inflation gauge — the PCE index — was released Thursday, and its implications for the rate outlook will continue to be digested heading into the July 4th holiday-shortened week. Earnings season is just weeks away, and guidance from major cloud providers and semiconductor companies will be critical in answering the question that OpenAI’s IPO delay threw into sharp relief: is AI spending accelerating as promised, or are the bills coming due faster than the revenue? For now, the market appears to be in a prove-it mode.