Oracle’s disappointing performance in the artificial intelligence sector has significantly impacted U.S. indices, leading to a notable market sell-off. The company’s gross margin of only 14% on $900 million in revenue from renting Nvidia servers last quarter raised concerns among investors.
Market Impact and Indices Performance
Following the release of the troubling report from The Information, Oracle’s stock dropped by 5.6%. This contributed to broader declines in U.S. indexes:
- US500: Down 0.50% to 6,750 points
- US100: Fell 0.60% to 25,000 points
- Small-cap index: Dropped 1.15% to 2,472 points
The report suggested that Oracle might face losses of up to $100 million on some contracts involving Nvidia’s Blackwell chips, further exacerbating investor concerns.
Gold Approaches $4,000 Mark
In commodities, gold prices have been nearing the significant benchmark of $4,000 per ounce, closing at $3,983, a 0.55% increase. Intraday prices peaked at $3,990, indicating robust market interest despite overall economic uncertainties.
U.S. Dollar Strength Amidst Government Shutdown
Amid ongoing U.S. government shutdown concerns, the U.S. dollar has emerged as the strongest G10 currency. This situation continues to be watched closely by investors as markets anticipate the release of the FOMC minutes, which may provide clarity on the central bank’s future monetary policy.
Central Bank Perspectives
Several Federal Reserve officials have signaled the possibility of two interest rate cuts by the year’s end. Key remarks include:
- Stephen Miran: Described easing economic uncertainty and anticipated growth improvements.
- Neel Kashkari: Highlighted the ambiguous effects of tariffs on inflation while advocating for downshifting interest rates.
- Raphael Bostic: Emphasized the dual nature of AI – supportive to labor but potentially threatening job security in some sectors.
- Mary C. Daly: Characterized AI as potentially transformative without current evidence of widespread job losses.
New Zealand’s Rate Decision Anticipation
Looking ahead, the Reserve Bank of New Zealand (RBNZ) is expected to announce a 25 basis point cut during its upcoming meeting. Market participants are alert to the possibility of a more significant change, especially given the New Zealand dollar’s current standing as the third-weakest G10 currency this year.
Cryptocurrency Market Updates
The cryptocurrency market is also experiencing adjustments. Bitcoin has fallen by 2.66% to $121,404, and Ethereum decreased by 4.15% to $4,495. The total altcoin market capitalization has contracted by 1.17%, bringing it to approximately $1.17 trillion.
In summary, Oracle’s diminishing margins, the surging price of gold, and the prevailing strength of the U.S. dollar reflect the complex interplay of market dynamics amid ongoing economic uncertainties.
