SAP sued by o9 Solutions over alleged trade secret theft
Investing.com--The S&P 500 closed lower Tuesday, snapping a seven-day winning streak as tech took a breather from a recent melt-up after Oracle’s slump amid margin concerns cooled some optimism on the AI-led rally.
At 4:00 p.m. ET (20:00 GMT), the benchmark S&P 500 fell 0.4%, the tech-heavy Nasdaq Composite fell 0.7%, and the blue-chip Dow Jones Industrial Average fell by 91 points, or 0.5%.
Oracle cuts some losses after sliding on margin concerns
Oracle Corporation (NYSE:ORCL) fell more than 2% after The Information, citing internal documents, suggested that margins in in the company’s cloud business was softer than Wall Street is expecting after losing nearly $100 million from renting out access to Nvidia chips.
Alphabet Inc Class A (NASDAQ:GOOGL) was down more than 1% adding further pressure on tech. Advanced Micro Devices Inc (NASDAQ:AMD), however, continued to add to gains from a day earlier, amid ongoing optimism that its deal with OpenAI, paves the way for the chipmaker to soak up AI-led chip demand.
In other tech news, Dell raised its long-term financial targets ahead of a closely-monitored analysts’ meeting later today, saying it is now aiming to post annual revenue growth of 7%-9%, up from 3%-4% previously. Earnings per share is also tipped to expand by 15% or more, compared to a prior forecast of roughly 8%.
The AI server maker also reiterated its financial guidance for the third quarter and current fiscal year, with executives saying the business is "capitalizing on the unprecedented pace of change in technology, especially in AI, and is well positioned with a leading portfolio from data center infrastructure to PCs." Shares in Dell spiked by more than 4%.
Shutdown continues, but tentative path to breaking deadlock emerges
President Trump signaled that he was open to striking a deal on funding healthcare subsidies demanded by Democrats on the heels of another failed vote in Senate to end the shutdown.
The federal government’s shuttering, which is now stretching into its second week, has particularly 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 data to comment on, analysts are unsure how much their statements may shift the narrative around rates.
U.S. President Donald Trump has said he would be open to negotiating with Democrats over healthcare subsidies, possibly opening a path for a detente in the impasse in Washington.
Tesla cuts prices in US
Tesla Inc (NASDAQ:TSLA) fell more than 4% after cutting prices for its model Y SUV and Model 3 Sedan, stoking concerns about soft demand.
The move comes just as reports suggested the EV maker is gearing up to reveal a more affordable version of its popular Model Y sport-utility vehicle.
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 posted 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.
Meanwhile, Ford’s (NYSE:F) stock price dipped after the Wall Street Journal reported that a fire at a key supplier will likely disrupt business at the carmaker and other auto firms for months.
Shares of Constellation Brands (NYSE:STZ), on the other hand, rose by more than 1% after the alcoholic beverage maker posted a fall in second-quarter sales that was not as deep as feared.
Demand for beer was solid, despite worries that Trump’s crackdown on immigration will impact Constellation’s key Hispanic consumers.
Gold’s new record 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. Analysts at ING said "political shakeups in France and Japan are fuelling fiscal concerns" have bolstered gold as well, along with "a surge in demand from both retail investors and institutional inflows in Europe and Japan."
Elsewhere, oil prices were lower as traders weighed a smaller-than-anticipated November output hike from the OPEC+ producer group against expectations for a supply glut.
(Scott Kanowsky contributed to this report).