Nasdaq Index: Oracle’s AI Margin Warning Sparks Selloff in US Stocks Today

Oracle Margin Miss Puts S&P 500’s Eight-Day Rally at Risk, Defensives Lead

At midday Tuesday, the S&P 500 was on track to snap its eight-day rally after Oracle fell more than 5% on reports it’s losing money on Nvidia chip deals. The cloud margin warning triggered a tech-led selloff, pressured the Nasdaq Composite, and pushed traders toward defensives like utilities, staples, and health care.

Can AI Still Justify Its Price Tag?

The Information reported Oracle’s cloud margins are weaker than analysts expected and that it’s taking losses on some GPU rental contracts. That sent a chill through the broader AI trade, with investors questioning how much profit these massive chip outlays are actually generating. Translation: AI’s still the future, but margins need to catch up to valuations.

Sector Check: Defensives Hold, Growth Names Slide

Defensives are absorbing the exodus: utilities +0.7%, staples +0.8%, health care +0.15% (Centene and Molina higher on ACA subsidy hopes).

Growth is bleeding: tech -0.7%, energy -0.8% as crude hits its lowest level since May, discretionary -1%.

Oil weakness also weighed on Marathon Petroleum and Halliburton (down nearly 3%) and on Phillips 66, Devon, and Valero (off more than 2%).

Movers: Figma, IBM, AMD Up; Ford, Homebuilders Down

Figma rallied 7% after OpenAI’s Sam Altman highlighted its new ChatGPT integration.

IBM gained 3% on plans to integrate Anthropic’s Claude chatbot across its software lineup, and AMD added 3% on a Jefferies upgrade to buy projecting 47% upside.

PayPal climbed 3% after launching a new ad feature for small businesses, while Dell fluctuated after raising its full-year revenue outlook to 7%–9% and guiding earnings up ≥15%.

On the downside, Ford was down more than 7% after a fire at a key aluminum supplier signaled potential production delays.

Homebuilders D.R. Horton, Toll Brothers, and KB Home slipped about 5% after Evercore downgraded the group, citing margin pressure.

Dollar Tree declined roughly 3% on a Jefferies downgrade, while Aehr Test Systems plunged over 20% after posting weaker revenue and withholding guidance.

Constellation Brands rose 2% after topping expectations on both earnings and revenue.

Trilogy Metals surged 225% after the White House invested $35.6 million for a 10% stake—a rare direct U.S. government equity play.

Market Outlook: What Traders Are Watching Into the Afternoon

The government shutdown, now in its second week, continues to stall key data releases, leaving the Fed flying blind on labor and inflation trends.

Gold futures climbed to $4,000 as traders sought safety, while Treasury yields edged lower.

With the Nasdaq still under pressure, traders are watching whether dip-buyers step in to defend tech. If Oracle’s margin squeeze previews broader AI disappointments, this rotation into defensives has legs.

More Information in our Economic Calendar.