S&P 500 falls after giving up gains as Oracle slump weighs on tech
Investing.com - U.S. stock futures tick down as a federal government shutdown dampens some of the excitement sparked by recent artificial intelligence dealmaking. Tesla is reportedly set to reveal a more affordable version of its Model Y SUV, while AI server group Dell will hold a closely-watched analyst day and brewer Constellation Brands reports a smaller-than-expected drop in quarterly sales despite pressure from a sweeping U.S. immigration crackdown.
1. Futures inch lower
U.S. stock futures pointed lower on Tuesday, with traders assessing concerns over the ongoing U.S. government shutdown, which has partly overshadowed still-soaring enthusiasm around artificial intelligence.
By 02:57 ET (06:57 GMT), the Dow futures contract had slipped by 101 points, or 0.2%, S&P 500 futures had dipped by 9 points, or 0.1%, and Nasdaq 100 futures had decreased by 28 points, or 0.1%.
The benchmark S&P 500 and tech-heavy Nasdaq Composite both logged fresh record closing highs in the prior session, thanks in large part to the announcement of a deal between semiconductor group Advanced Micro Devices and OpenAI. The agreement, which will see AMD supply AI chips to OpenAI in exchange for a 10% stake in the ChatGPT-maker and is anticipated to draw in tens of billions of dollars in yearly revenue, drove shares in AMD higher by 23.7% and the wider Philadelphia Semiconductor Index up by 2.9%.
Yet the broader economic backdrop remained murky. The now almost week-long federal government shuttering has crucially caused a delay to the release of key economic data, potentially making it more difficult for both financial markets and Federal Reserve policymakers to gauge the path ahead for U.S. interest rates. Instead, investors and Fed officials have had to seek out alternative data, often from private sources.
Some Fed-linked figures will still be published despite the shutdown, including a survey of consumer expectations for the New York Fed later today. A collection of central bank members are due to speak as well, although without fresh data to comment on, analysts are unsure how much their statements may shift the narrative around rates.
2. Tesla’s potential new Model Y reveal
Tesla is anticipated to reveal a more affordable version of its popular Model Y sport-utility vehicle on Tuesday, according to media reports.
Over the weekend, the electric carmaker fueled excitement among its fans, posting two videos on X that appeared to tease an announcement on October 7. Yet it remains unclear if there will be an in-person event, or if Tesla will make some other type of statement.
CEO Elon Musk has previously scrapped plans to come out with a less pricey $25,000 EV, Reuters has reported. But the news agency said, based on current manufacturing and design platforms, the possible car this week will be a more "affordable" offering.
Tesla recently notched record quarterly sales, although the level was boosted by the expiration of EV tax credits in the U.S., which effectively lifted prices in the country by $7,500. Sales are tipped to decelerate over the rest of 2025.
3. Dell analyst meeting in focus
Traders will likely be keeping tabs on an analyst day at Dell, which could provide another glimpse into the state of the AI boom.
In August, Dell lifted its annual revenue and profit forecasts, thanks in large part to demand for its AI-optimized servers which are underpinned by advanced chips made by Nvidia.
While demand has spiked for the AI servers from firms like Dell and Super Micro Computer which are capable of handling massive AI workloads, worries have swirled around the high costs of producing them. Margins, in turn, could be pressured.
However, Dell, whose clients include Musk’s AI startup xAI and CoreWeave, said it now expects to bring in $20 billion in revenue from AI server shipments in its fiscal 2026 year -- up from a prior outlook of $15 billion.
4. Constellation Brands sales dip by less than anticipated
Shares of Constellation Brands rose in extended hours trading after the alcoholic beverage maker posted a fall in second-quarter sales that was less than anticipated.
Demand for beer was solid, despite fears that U.S. President Donald Trump’s crackdown on immigration will impact Constellation’s key Hispanic consumers.
Constellation reiterated its full-year sales and profit outlook, which was slashed heavily in September due partially to economic uncertainty and Trump’s immigration policies leading some Latino customers -- who have been keen buyers of the company’s Corona and Modelo brands -- to rein in spending on social gatherings or dining at restaurants.
CEO Bill Newlands said that while the beer unit had outperformed its rivals, the "socioeconomic environment" has been "challenging" and has "dampened consumer demand."
Meanwhile, like industry peers Molson Coors and Brown-Forman, Constellation has been attempting to deal with a surge in U.S. import tariffs on aluminum cans, which has threatened to eat away at profit margins.
5. Gold’s new all-time high
Gold prices touched a new all-time high near $4,000 an ounce, as safe-haven demand was powered by the political impasse in the U.S. and bets of a U.S. rate cut later this month.
Markets mostly expect the Fed to cut borrowing costs by a quarter of a percentage point at its upcoming gathering on October 28-29, CME’s FedWatch Tool showed. The central bank previously restarted an easing cycle in September and indicated that more drawdowns could be coming before the end of the year.
This has helped burnish non-yielding bullion, which tends to perform better in the low-rate environments.
Data showing increased gold buying by the People’s Bank of China also supported prices of the yellow metal.
Spot gold ticked down by 0.3% to $3,950.58/oz after hitting a peak of $3,977.45/oz earlier in the session. Gold futures for December dipped 0.1% to $3,973.80/oz by 03:43 ET.