S&P 500 Sees First Drop in 8 Days Due to Oracle Slump and Shutdown Concerns Live Updates
New York Stock Exchange: Market Volatility Amid AI Concerns and Government Shutdown
Wall Street Faces Decline as AI Demand Worries Impact Tech Stocks
The trading floor of the New York Stock Exchange was marked by uncertainty as Wall Street saw declines across major indices on Tuesday. Concerns surrounding artificial intelligence demand, coupled with a drop in Oracle shares, led to the S&P 500 pulling back by 0.4%, with the Nasdaq Composite falling by 0.7% and the Dow Jones Industrial Average dipping by 105 points, or 0.2%.
Oracle Shares Tumble on Cloud Business Margins
Oracle experienced a significant decline, dragging down tech stocks after a report from The Information revealed that the company’s cloud business margins are not meeting analyst expectations. The revelation that Oracle is losing money on some deals, particularly those involving Nvidia chip rentals, sent Oracle shares plummeting by over 5% and brought the Nasdaq to its session low. This raised investor concerns about the return on investment in AI developments.
Government Shutdown Stalemate Persists as Senate Blocks Funding Bill
The ongoing U.S. government shutdown entered its second week with no resolution in sight. Despite hopes for a Monday reopening, the Senate failed to pass a bill to fund the government through November 21st. The vote fell largely along party lines, requiring at least eight Democrats to side with Republicans to achieve the necessary 60 votes for passage. President Donald Trump attributed the shutdown to Democratic opposition, despite suggesting potential agreement on healthcare-related negotiations.
Investors Turn to Safe-Haven Assets as Uncertainty Mounts
The uncertainty surrounding the shutdown prompted investors to shift toward safe-haven assets, with gold futures reaching $4,000 per ounce for the first time. As the shutdown persists, pressure mounts on Congress to reach an agreement, especially with the looming impact on government workers and military personnel who may miss upcoming paychecks. Analysts anticipate that a temporary funding resolution could emerge to extend negotiations into November.
Economic Data Delays Heighten Focus on Federal Reserve
With the shutdown delaying critical economic reports such as the September jobs report, investors’ focus has shifted to the Federal Reserve. Risks associated with the labor market and inflation underscore the importance of upcoming Fed communications, including statements from Vice Chair Michelle Bowman and other officials, as well as the release of Fed minutes. These insights are crucial as the market speculates on future rate cuts and potential increases in mergers and acquisitions activity, which have previously propelled markets to record highs.
