Oil climbs as UAE exits OPEC, AI doubts pressure stocks

U.S. equities fell on Tuesday as investors weighed the deadlock in the Iran war and the United Arab Emirates’ announcement that it would quit OPEC and OPEC+. The move deals a blow to the cartel’s de‑facto leader Saudi Arabia and comes as the Middle‑East conflict continues to disrupt energy flows through the Strait of Hormuz. Oil prices responded with a rally, Brent hovering near a three‑week high and U.S. crude breaking the $100 per barrel barrier for the first time since April 13, up 3.93% to $100.16, while Brent rose 2.68% to $111.13.

The Nasdaq Composite slipped more than 1% as doubts surfaced about the sustainability of the AI boom. A Wall Street Journal report said OpenAI missed its internal targets for weekly users and revenue, raising questions about the firm’s ability to fund its data‑center spending. Analysts noted that technology and communication‑services stocks account for roughly 40% of the benchmark, so any slowdown at OpenAI could reshuffle market leadership. Shares of AI‑related companies such as Oracle and CoreWeave each fell over 3%.

Bond markets also felt the pressure, with the two‑year Treasury yield climbing 3.9 basis points to 3.844% as higher oil prices fed inflation expectations. The 10‑year yield rose to 4.36% and the 30‑year to 4.9523%. The dollar index inched up 0.15%, while the British pound slipped 0.1% against the greenback. In Asia, the Bank of Japan kept short‑term rates at 0.75%, and the yen weakened to around 159.54 per dollar, just below the 160 threshold that could trigger intervention. The Fed, Bank of England and European Central Bank are slated to announce policy decisions later this week, with markets expecting rates to stay on hold.