S&P 500 dropped 1.7% and Nasdaq fell 2.9% as AI chip stocks reversed early gains, with OpenAI filing for IPO amid market uncertainty

The S&P 500 dropped 1.7%, the Nasdaq composite fell 2.9%, and the Dow Jones Industrial Average was down 408 points, or 0.8%, as of 1 p.m. Eastern time. Chip and memory stocks that had opened higher swung to losses: Micron Technology went from a jump of 4.2% to a drop of 7.6%; Marvell Technology dropped 13.3%; Advanced Micro Devices sank 8.7%; and Nvidia fell 3.1%.

OpenAI filed confidential paperwork with U.S. regulators for an initial public offering on Monday, and SpaceX's IPO could happen later this week. The moves follow last week's industrywide sell-off in AI stocks.

Oil prices fell 2.7% to $91.66 per barrel for Brent crude, but Treasury yields remain elevated: the 10-year Treasury yield fell to 4.54% from 4.56% late Monday, though it stays well above its 3.97% level from before the war with Iran. Wall Street traders largely expect the Federal Reserve will raise its main interest rate at least once by the end of this year.