Stocks post second weekly decline as tech earnings and Fed decision approach

Nvidia in talks to provide roughly $250 billion backstop for OpenAI

The S&P 500 and Nasdaq composite both fell last week for the second time in a row, weighed down by what The Wall Street Journal described as familiar threats: inflation, war and eye-watering AI budgets. The S&P 500 stood at 7,411.98 and the Nasdaq composite at 24,975.82, according to Federal Reserve Economic Data.

Pressures could mount in the days ahead, the Journal reported, as Microsoft and Meta Platforms report earnings on the same day the Federal Reserve delivers an interest-rate decision the Journal called unusually unpredictable. This year’s stock rally has already withstood inflation, war and massive capital spending on artificial intelligence, but investors may be reaching their limit, according to the Journal.

Predictions of an AI-driven hiring wipeout have yet to materialize, the Journal reported. Companies across tech, transportation and defense are hiring again, offering what the Journal described as a bright spot as investors brace for the week ahead.

In a separate development, Nvidia is in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data-center project, people familiar with the matter told the Journal. The guarantees from Nvidia would help the ChatGPT maker lease a 10-gigawatt project that SoftBank’s energy subsidiary is developing in southern Ohio, the people said. The project could cost more than $500 billion in total.

The power for the project is controlled by the U.S. government and funded separately by Japan under a recent trade deal, the Journal reported. The transaction would be one of the most ambitious financial deals yet in America’s AI boom.