S&P 500 snaps seven-day winning run dragged by Oracle, Tesla and shutdown angst

Benchmark indices on Wall Street ended the session lower on Tuesday, October 7, led by selling pressure in big tech stocks and the US government shutdown entering its seventh day with no signs of the impasse ending.

The Dow Jones ended another rangebound session lower, extending losses for the second day, while the S&P 500 snapped a seven-day gaining streak. The Nasdaq emerged as the underperformer with losses of nearly 0.7%.

Reports quoting "The Information", stated that Oracle's gross margins on chips that it buys from Nvidia and rents to players like OpenAI are just 14%, in comparison to their consolidated 70% gross margins. The report sent the stock down by over 3%, which weighed on the Nasdaq.

Tesla shares too declined by over 4% after the company launched two new variants, the Model Y Standard, just below $40,000 and the Model 3 Standard, at just $37,000. Investors, who were hoping for bigger launches, such an update on the Roadster, were left disappointed and sent the stock tumbling down.

The US Government shutdown extended for the seventh day. Flights in certain US cities are starting to see delays due to staffing shortages. In case the impasse does not end by the middle of next week, active members of the armed forces will also not be paid.

US President Donald Trump said that he is in talks with the Democrats, a claim that was denied by Senate Democrat leader Chuck Schumer, although he added that if the Republicans are willing to talk, they are ready to come to the table. A fifth attempt at ending the stoppage fell through in the senate late Monday night, on expected lines.

The US Dollar continues to strengthen, now nearing the mark of 99, while Gold futures crossed the mark of $4,000 for the first time ever. BofA Securities warned of some consolidation in Q4 after such a rally, citing "uptrend exhaustion", while Ray Dalio, founder of Bridgewater Associates, said that investors should hold more gold than before as it does well when the portfolio goes down.

All eyes today will be on the US Federal Reserve's last policy meeting minutes, which will be released later today. Newly appointed governor Stephan Miran reiterated that policy easing should continue as the impact of tariffs on inflation is limited, while Minneapolis Fed President Neel Kashkari warned that any drastic rate cuts could stoke inflation further.