Wall Street pulled back on Tuesday, with investors weighing concerns over artificial intelligence profitability and ongoing uncertainty in Washington. The S&P 500 snapped a seven-day winning streak, slipping 0.38% to close at 6,714.59. The Nasdaq Composite fell 0.67% to 22,788.36, while the Dow Jones Industrial Average lost nearly 92 points, or 0.2%, to finish at 46,602.98.
The pullback followed record intraday highs for both the S&P 500 and Nasdaq earlier in the session, before a sell-off in technology stocks shifted momentum.
Oracle shares drag on tech sector
The slide was led by Oracle, which tumbled 2.5% after The Information reported that its cloud division is generating slimmer margins than analysts expect and is losing money on some deals to rent Nvidia chips. The Nasdaq hit its session low on the news, reflecting broader unease about the high cost of AI adoption.
Government shutdown enters second week
Markets were also pressured by the ongoing U.S. government shutdown, now in its seventh day. Hopes for a resolution dimmed after the Senate once again failed to pass a House funding bill. President Donald Trump blamed Democrats, accusing them of holding up progress over demands to extend enhanced Obamacare tax credits. Senate Minority Leader Chuck Schumer quickly pushed back, saying Republicans had yet to make a serious offer.
The shutdown is already delaying economic data releases and could worsen if it stretches into next week, when active duty military personnel would miss paychecks. Gold futures surged to US$4,000 per ounce for the first time as investors moved into safe-haven assets.
Global context
Adding to market jitters, Trump signalled possible new tariffs on Canadian imports after talks with Prime Minister Mark Carney, saying Canada is “competing for the same business.” Trade uncertainty, coupled with the shutdown, has prompted analysts to warn that sentiment may shift quickly if risks pile up.
Local outlook
Closer to home, Australian shares are expected to slip at the open, with SPI futures down 4 points. Investors are also watching the Reserve Bank of New Zealand, which is widely expected to cut interest rates at its policy meeting, with a decision due at midday AEDT.
