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Top Midday Stories: OpenAI Reportedly Misses Internal Revenue, User Targets; Spotify Shares Fall After Tepid Guidance

The Dow Jones Industrial Average was up slightly, while the S&P 500 Index and Nasdaq Composite were down in late-morning trading Tuesday due, in part, to a downbeat report on OpenAI.In company news, Microsoft-backed (MSFT) OpenAI recently missed its own targets for new users and revenue, The Wall Street Journal reported late Monday, citing people familiar with the matter. The company missed an internal goal of hitting 1 billion weekly active ChatGPT users by the end of the last year, and it missed its yearly revenue target for ChatGPT, as well, the people reportedly told The WSJ. Chief Financial Officer Sarah Friar has expressed concern to other company leaders that OpenAI might not be able to pay for future computing contracts if revenue doesn't grow fast enough, the report said, citing the people. Microsoft shares were up 0.3% around midday.Spotify Technology (SPOT) reported Q1 earnings Tuesday of 3.45 euros ($4.03) per diluted share, up from 1.07 euros a year earlier and above the FactSet consensus analyst estimate of 2.95 euros. First-quarter revenue was 4.53 billion euros, up from 4.19 billion euros a year ago and matching the FactSet consensus estimate. For Q2, Spotify said it expects revenue of 4.8 billion euros, above the FactSet consensus of 4.77 billion euros. The company also said it expects 299 million premium subscribers in Q2, below the FactSet consensus of 300.4 million. Spotify shares were down 13.7%.Coca-Cola (KO) reported Q1 adjusted earnings Tuesday of $0.86 per share, up from $0.73 a year earlier and above the FactSet consensus of $0.81. First-quarter revenue was $12.47 billion, up from $11.13 billion a year ago and above the FactSet consensus of $12.24 billion. For full-year 2026, the company expects organic revenue growth of 4% to 5% and comparable earnings growth of 8% to 9%. Coca-Cola shares were up 5.9%.General Motors (GM) reported Q1 adjusted earnings Tuesday of $3.70 per diluted share, up from $2.78 a year earlier and above the FactSet consensus of $2.60. First-quarter revenue was $43.62 billion, down from $44.02 billion a year ago but above the FactSet consensus of $43.51 billion. For full-year 2026, the automaker now expects adjusted EPS of $11.50 to $13.50, up from $11 to $13 and compared to the FactSet consensus of $12.20. The company's board declared a quarterly cash dividend of $0.18 per share, payable June 18 to shareholders of record as of June 5. General Motors shares were down 1.6%.United Parcel Service (UPS) reported Q1 adjusted earnings Tuesday of $1.07 per diluted share, down from $1.49 a year earlier but above the FactSet consensus of $1.01. First-quarter revenue was $21.20 billion, down from $21.55 billion a year ago but above the FactSet consensus of $20.98 billion. For full-year 2026, the company said it expects revenue of about $89.70 billion, above the FactSet consensus of $89.62 billion. UPS shares were down 4.2%.Walt Disney's (DIS) broadcast licenses may be headed for review by the Federal Communications Commission, Semafor reported Tuesday, citing people familiar with the matter. Disney shares were down 0.6%.Price: $426.28, Change: $+1.46, Percent Change: +0.34%

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UAE's OPEC+ Exit Weakens Cartel's Market Grip, Raises Volatility Risks, Analysts Say

The UAE has withdrawn from OPEC and the broader OPEC+ alliance, delivering a significant blow to the group's ability to manage global oil markets and raising questions about the future of coordinated supply policy, Rystad Energy strategists said on Tuesday.The Gulf state, which produces about 4.8 million barrels per day and has ambitions to raise output further, has been among a handful of members capable of adjusting supply to respond to market shocks."OPEC and OPEC+ have only ever been as strong as members' willingness to hold barrels back," Jorge Leon, head of geopolitical analysis at Rystad Energy, said in a market note on Tuesday. "Losing a member with significant spare capacity takes a real tool out of the group's hands."The UAE's departure strips the producer group of one of its core mechanisms of influence, spare capacity that can be deployed to offset disruptions or withdrawn to support prices.Leon said the move weakens the group's ability to manage supply imbalances over time.Rystad said the impact on prices may be limited by ongoing geopolitical risks in the near term, including the Strait of Hormuz blockade, which continues to inject uncertainty into global supply flows.However, the longer-term implications are more profound. The consultancy said that with less spare capacity concentrated within the group, OPEC+ may find it difficult to calibrate output and maintain price stability.The shift comes as global oil demand approaches a potential peak, altering the incentives for low-cost producers. Rather than holding back production under quota systems, countries with available capacity may prioritize maximizing output and protecting market share.The move could place greater pressure on Saudi Arabia to shoulder a larger share of production adjustments to stabilize markets, a role Rystad analysts said may become difficult to sustain on its own.Saxo Bank strategists said the UAE's departure from OPEC and OPEC+ marks a shift in global oil policy at a time when the ongoing Iran conflict has disrupted global energy flows and drained both commercial and strategic crude inventories worldwide."The UAE is seizing the opportunity to exit OPEC and remove production constraints that have limited its ability to utilize growing capacity," said Ole Sloth Hansen, head of commodity strategy at Saxo Bank.The UAE has steadily expanded its production capacity in recent years, driven by upstream investments led by Abu Dhabi's Adnoc Group. Saxo Bank said that before output fell last month to 2.2 million b/d, production had climbed to about 3.6 mmb/d.The country's current crude production capacity stands at about 4.85 mmb/d, with a target of reaching 5 mmb/d by 2027.Meanwhile, Sparta Commodities analysts said the producer cartel is facing renewed questions over its long-term cohesion after the UAE's departure, though the immediate impact on global oil balances remains muted."For the short-term, it means very little in terms of oil balances with the Strait of Hormuz closed," the analysts said, adding that the implications are more in the longer-term if and when the OPEC+ group gets back to its prior role in the market.Over the longer term, the UAE is expected to increase production to about 4.5-4.8 million b/d, up from its OPEC+ quota of about 3.4 million b/d. Sparta said the shift could introduce additional barrels into the market, potentially putting downward pressure on prices.With the exit, Phil Flynn, senior market analyst at Price Futures, said the UAE is positioning itself to ramp up oil production as it seeks greater autonomy outside the constraints of OPEC+.Flynn said that the UAE has long been constrained by an outdated production baseline set at about 3.2 million b/d in about 2018. However, the Gulf state has since made significant investments in upstream capacity, lifting its production potential to exceed 5 million b/d in the coming years.

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Top Midday Stories: OpenAI Reportedly Misses Internal Revenue, User Targets; Spotify Shares Fall After Tepid Guidance

Top Midday Stories: OpenAI Reportedly Misses Internal Revenue, User Targets; Spotify Shares Fall After Tepid Guidance

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