Dow gains as Treasury yields retreat, but S&P 500 and Nasdaq fall on AI revenue concerns

Key points

• The Dow Jones Industrial Average closed up 51.77 points (0.1%) at 51,231.64, while the S&P 500 dropped 0.47% to 7,765.36 and the Nasdaq Composite fell 1.25% to 27,193.34.
• A Financial Times report indicated OpenAI’s annualized revenue is approximately $20 billion lower than previously signaled, triggering a selloff in AI and semiconductor stocks.
• Bitcoin mining stocks declined sharply, with Cipher Digital and Hut 8 dropping 10% each, and Riot Platforms falling 11%, amid concerns about AI pivot capital expenditures.
• President Trump stated on Truth Social that the U.S. will not attack Iran before the November 3 midterm elections, causing oil prices to ease from their intraday highs.
• Federal Reserve Governor Christopher Waller and St. Louis Fed President Alberto Musalem indicated that additional interest rate hikes may be necessary to control inflation, with Musalem citing an 18-month timeframe.
• The 30-year Treasury auction yielded 5.618%, up 31 basis points from September, signaling a steepening yield curve as investors demand more compensation for long-duration risk.

Background

This session followed a record-high close for the S&P 500 and Nasdaq on October 6, 2026, driven by AI and semiconductor strength. Prior to that, markets had experienced volatility due to rising Treasury yields and geopolitical tensions, including U.S.-Iran diplomatic talks in late September that had previously cooled oil prices and market volatility.

How outlets are covering it

MarketWatch and CNBC both reported the divergence between the Dow’s gain and the S&P 500/Nasdaq losses, attributing the tech selloff to AI-related stock struggles. CNBC highlighted a Financial Times report on OpenAI’s revenue shortfall as a key driver, while MarketWatch emphasized the retreat in Treasury yields as a support for the Dow. CNBC also noted that D.A. Davidson analyst Gil Luria remained optimistic about OpenAI despite the revenue report, citing accelerated growth and a combined $120 billion revenue run rate for OpenAI and Anthropic. Yahoo Finance provided intraday data showing crude oil jumping midday before easing on Trump’s Iran comments, and noted that Bitcoin miners tumbled due to AI pivot concerns. All sources agreed on the impact of Federal Reserve officials’ hawkish comments on inflation and potential rate hikes.

Why it matters

The divergence between the Dow and tech-heavy indices highlights growing investor caution regarding AI valuations and revenue realization. The retreat in Treasury yields provided temporary relief, but hawkish Federal Reserve signals and geopolitical risks, including oil price volatility, continue to pressure markets. The OpenAI revenue report and subsequent selloff in AI and mining stocks indicate that investors are reassessing the profitability and capital intensity of AI-driven business models. This could influence broader market sentiment and sector rotations in the coming weeks.

What to watch

Investors will monitor the 30-year Treasury auction results and Federal Reserve officials' comments for clues on future rate policy. The impact of the OpenAI revenue report on AI and semiconductor stocks may continue to weigh on the Nasdaq. Oil prices may remain volatile as geopolitical tensions, including U.S.-Iran relations, evolve. The November 3 midterm elections may influence political and economic policy expectations, potentially affecting market sentiment.