SG Morning Brief | Chip Stocks Slide on OpenAI Doubts, All Eyes on Fed and Mag 7

US Overnight

The S&P 500 fell 0.49% to 7,138.80, snapping a streak of record closes. The Nasdaq Composite dropped 0.9% to 24,663.80, and the Dow shed 25.86 points (-0.05%) to 49,141.93. The 10-year Treasury yield rose 2.4 bps to 4.36%. Selling was concentrated in chip and AI-infrastructure names after a Wall Street Journal report revealed that OpenAI has missed multiple internal revenue and user-growth targets this year, with CFO Sarah Friar warning leadership that future computing contracts may become hard to fund. The VanEck Semiconductor ETF (SMH) slid roughly 3%. WTI crude settled at $99.93/bbl (+3%), its highest since early April, after the UAE announced it would leave OPEC+ effective May 1 and stalled US-Iran Hormuz talks kept supply fears elevated. Brent closed at $111.26.

Key Movers

Broadcom (AVGO) -4% -- The chipmaker bore the brunt of the OpenAI-driven AI infrastructure selloff. With a $300 billion Oracle-OpenAI data-centre deal in the spotlight, any doubt about the pace of AI compute spending hits Broadcom's custom accelerator and networking business directly. AMD (-3%), Intel (-1%), and Oracle (-3 to 4%) fell in sympathy.

Oracle (ORCL) -4% -- Oracle is the linchpin of OpenAI's data-centre buildout via a five-year, $300 billion supply deal. The WSJ report questioning OpenAI's ability to sustain compute spending struck at the core of Oracle's AI-revenue thesis. An Oracle spokesperson pushed back, calling OpenAI's demand "rapidly growing," but the stock still finished well off its morning lows.

Coca-Cola (KO) +3.9% -- A bright spot in an otherwise risk-off session. The beverage giant beat Q1 estimates and raised its profit outlook, with global unit case volume up 3% versus the 1% Wall Street expected. North America volume grew 4%, driven by low-calorie drinks and mini cans.

After hours, Starbucks (SBUX) surged roughly 5% after posting its strongest quarter in over two years. Adjusted EPS came in at $0.50 versus the $0.44 consensus, on revenue of $9.53 billion versus $9.17 billion expected. US same-store sales jumped 7.1%, led by a 4.3% transaction increase. CEO Brian Niccol called it "the turn in our turnaround" and raised the full-year comp-sales outlook to at least +5% from +3%. One of the few companies willing to hike guidance amid the current geopolitical backdrop.

SGX Preview

The STI traded around the 4,908-4,910 level on Monday, under pressure from falling US futures and rising oil prices. DBS closed near S$56.80 on April 27 (the most recent available close), dipping from S$56.90 the prior session, while OCBC traded around S$20.19 and UOB edged lower. The three banks, which make up roughly half the index weight, face a mixed setup: higher oil supports net interest margins via elevated rates, but the global growth drag from the Iran conflict and the Hormuz disruption weighs on trade-sensitive Singapore. Crucially, DBS reports Q1 2026 earnings on Thursday (April 30), the same day as Apple's results. Expect positioning ahead of that release to dominate local flows today.

Asia Pre-Market

S&P 500 futures are roughly flat (+0.08%) and Nasdaq futures are fractionally lower (-0.02%) as traders await the FOMC decision and a wave of Magnificent Seven earnings after the close. WTI is holding near $97-99/bbl. Gold pulled back sharply to around $4,591/oz as the strong dollar and rising yields pressured the metal. Bitcoin is trading near $76,200, down roughly 2% as risk sentiment cooled. The flat futures setup suggests markets are in a holding pattern -- the real moves come tonight with the Fed and four mega-cap earnings simultaneously.

Today's US Earnings and Economic Calendar

Earnings Spotlight: Alphabet (GOOGL) -- Consensus sits at $2.63-2.68 EPS on approximately $106.9 billion in revenue, representing 18-19% year-over-year top-line growth. The key number is Google Cloud: analysts expect roughly $18.4 billion in Cloud revenue (+50% YoY), which would confirm that AI demand is translating into real infrastructure spend. EPS is expected to dip about 4.6% YoY despite strong revenue growth, largely due to an accelerating depreciation wave from Alphabet's massive $175-185 billion FY2026 capex guide. The $32 billion Wiz acquisition, which closed in Q1, adds an enterprise security dimension to the Cloud story. A clean beat across all four Mag 7 names tonight would validate the AI spending thesis that the OpenAI report just called into question. Tomorrow brings a macro triple-header: Q1 GDP advance estimate, March PCE, and the Employment Cost Index -- all landing the morning after the Fed. This is Powell's likely final meeting as chair (his term ends May 15), adding an extra layer of scrutiny to his tone.

One More Thing

Today is arguably the most consequential single session of 2026. The FOMC decision lands at 2 PM ET, then four companies representing roughly 44% of the S&P 500's market cap report within minutes of each other. The OpenAI report planted a seed of doubt about AI spend sustainability; tonight's earnings calls are the rebuttal window. If Cloud growth from Alphabet, Azure from Microsoft, and AWS from Amazon all print above expectations, the chip selloff gets filed under "buying opportunity." If any of them flag softening AI demand or pull back capex guidance, the correction has further to run. For Singapore-based investors, the sequencing matters: the Fed and earnings land overnight, DBS reports tomorrow, and GDP and PCE drop Thursday morning US time. It is a 36-hour stretch where almost every macro and micro catalyst converges. Stay nimble.

This briefing is for informational purposes only and does not constitute investment advice.