Stocks Halt Record-Breaking Run as Oracle Tumbles: Markets Wrap
(Bloomberg) — Wall Street failed to gain traction as a rally that drove stocks to all-time highs showed signs of fatigue. Bonds wavered as traders parsed remarks from Federal Reserve officials ahead of a $58 billion Treasury sale.
Following a 35% surge from April’s lows, the S&P 500 retreated. Tesla Inc. led losses in megacaps after a surge driven by expectations over a new product. Oracle Corp. sank 6% after The Information reported that the company’s internal documents showed the challenges of renting out Nvidia Corp.’s chips.
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The recent market ebullience driven by optimism over artificial intelligence saw the index notch a series of records, eclipsing concerns such as the US government shutdown and spurring calls for consolidation.
Goldman Sachs Group Inc.’s trading desk reported last week that bullish sentiment among clients was the highest since December. A sentiment tracker compiled by Barclays Plc has been sitting near a level that indicates exuberance. A similar Bloomberg Intelligence measure is back to “manic” zone.
“A period of consolidation would not come as a surprise after such a strong recent run, but we believe the equity rally is underpinned by solid fundamentals that should continue to support the market,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
The S&P 500 wiped out earlier gains, dropping to around 6,700. The yield on 10-year Treasuries declined two basis points to 4.13%. That’s despite data showing inflation expectations for the year ahead climbed in a Fed Bank of New York survey. The dollar rose.
Fed Governor Stephen Miran said tariff inflation may be yet to come but we haven’t seen that yet. He also noted that he doesn’t think the central bank needs to actively target long-term rates.
“Profit-taking risks have rapidly risen across markets, and are particularly elevated for Nasdaq, potentially hampering further upside,” said Citigroup’s Chris Montagu.
Craig Johnson at Piper Sandler says he remains optimistic, particularly with macro tailwinds lifting the stock market. However, he believes there are subtle signs of diverging momentum that warrant vigilance, especially with over-extended stocks that have risen substantially in recent weeks.
“A brief consolidation or shallow pullback would be welcomed to set up better risk-reward opportunities,” he noted.
Some Wall Street pros note that having multiple large technology stocks surge by double-digits in quick succession could be a sign that valuations have become disconnected from underlying fundamentals, and that investors have been buying primarily based on the fear of missing out on further gains.
The moves come amid growing concern about a bubble forming around AI as the key players pledge billions of dollars in deals with a cohort of companies making infrastructure for the technology. As more money is spent, there’s mounting fear that the trend will end in a crash the way it did 25 years ago following the dot-com euphoria.
Corporate Highlights:
Dell Technologies Inc. roughly doubled its growth estimates for sales and profit for the next two years, and said demand for artificial intelligence products will extend those higher projections at least through the 2030 fiscal year. International Business Machines Corp. announced a plan to integrate Anthropic’s artificial-intelligence technologies into its software solutions. Tesla Inc. plans to unveil a cheaper version of the Model Y on Tuesday, according to people familiar with the matter, following through on assurances it will have a more affordable vehicle to counter the loss of US incentives for electric vehicles. Constellation Brands Inc., the owner of the Corona and Modelo Especial brands in the US, reported better-than-expected results for its fiscal second quarter, citing robust beer and wine sales. Ford Motor Co. faces months of disruptions to its business after a major fire at an aluminum plant in New York, the Wall Street Journal reported. Ethiopian Airlines has more than 100 planes on order with Boeing Co., but delivery delays are hampering expansion at Africa’s biggest carrier. Intercontinental Exchange Inc., owner of the New York Stock Exchange, plans to invest as much as $2 billion in cash in Polymarket, a crypto-based betting platform. Bank of New York Mellon Corp. is exploring tokenized deposits to enable clients to make payments using blockchain, as major banks across the world step up use of the technology underpinning digital assets to transfer funds. Rising investor appetite for digital infrastructure, energy and transportation assets boosted fundraising for Manulife Investment Management, which closed its largest-ever infrastructure fund with $5.5 billion. Mercedes-Benz Group AG’s third-quarter car deliveries slumped 27% in China, where luxury spending remains muted and local manufacturers are dominating on electric vehicles. Zurich Insurance Group AG said it will reject BBVA SA’s bid for Banco Sabadell SA, raising the stakes in the takeover battle that’s set to end on Friday. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 11:35 a.m. New York time The Nasdaq 100 fell 0.5% The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 fell 0.2% The MSCI World Index fell 0.5% Bloomberg Magnificent 7 Total Return Index fell 0.8% The Russell 2000 Index fell 1% Oracle fell 5.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1671 The British pound fell 0.3% to $1.3439 The Japanese yen fell 0.5% to 151.16 per dollar Cryptocurrencies
Bitcoin fell 2.6% to $121,985.51 Ether fell 3.2% to $4,539.3 Bonds
The yield on 10-year Treasuries declined three basis points to 4.13% Germany’s 10-year yield was little changed at 2.71% Britain’s 10-year yield declined one basis point to 4.72% The yield on 2-year Treasuries declined one basis point to 3.58% The yield on 30-year Treasuries declined two basis points to 4.73% Commodities
West Texas Intermediate crude rose 0.1% to $61.77 a barrel Spot gold rose 0.6% to $3,984.92 an ounce ©2025 Bloomberg L.P.
