Daily summary: Oracle drags indexes lower, gold tests $4,000 💰

U.S. indexes ended the day lower, with selling pressure triggered by a concerning report from The Information highlighting margin risks in the AI business.

At the time of writing, the US500 was down 0.50% to 6,750 points, the US100 fell 0.60% to 25,000 points, and the small-cap index dropped 1.15% to 2,472 points.

Oracle plunged 5.6% following the report, which suggested the company generated only a 14% gross margin on $900 million in revenue from renting Nvidia servers last quarter — well below its typical margin. According to The Information, Oracle may have posted losses of up to $100 million on some Nvidia Blackwell chip leasing contracts.

On the macro front, several Fed officials spoke throughout the day.

Stephen Miran said economic uncertainty has eased and growth may improve. The Fed official supports two rate cuts by year-end.

Neel Kashkari commented that it is too early to assess the full impact of tariffs on inflation but noted recent data show stagflation-like symptoms. He also supports two additional 25 bp cuts this year.

Raphael Bostic focused on the impact of artificial intelligence on the labor market, noting that AI often supports workers but can also replace them when profitable. For now, Bostic does not see major risks from AI adoption.

Mary C. Daly described AI as potentially transformational and productivity-enhancing, adding that there is no evidence of mass job losses.

Meanwhile, the New York Fed released its latest inflation expectations survey, showing that in September, short-term (1-year) expectations rose to 3.4% and long-term (5-year) to 3.0%, while medium-term (3-year) expectations remained stable at 3.0%.

The U.S. dollar is the strongest G10 currency today despite lingering uncertainty around the ongoing U.S. government shutdown. Markets await the release of the FOMC minutes tomorrow, which may shed more light on the central bank’s outlook ahead of the October decision.

Gold gained 0.55% to $3,983 per ounce, coming very close to testing the $4,000 level. Intraday prices briefly touched $3,990.

Oil returned to losses after a strong start to the week, following disappointment over OPEC+’s smaller-than-expected production increase for November. While production is being raised, the move increases the risk of oversupply in the coming months. WTI crude is testing $65 per barrel, down nearly 0.4%.

The cryptocurrency market is also seeing its first deeper correction since late September. Bitcoin fell 2.66% to $121,404, Ethereum dropped 4.15% to $4,495, and the total altcoin market cap declined 1.17% to $1.17 trillion.

During the upcoming Asian session, the RBNZ will announce its rate decision. Consensus points to a 25 bp cut, though markets see a chance of a larger move and expect a dovish tone. The NZD remains the third-weakest G10 currency this year, behind the CAD and USD.