In a day marked by fluctuations, the S&P 500 saw its seven-day winning streak come to an end amid rising concerns regarding the profitability of artificial intelligence investments. Consumer discretionary stocks were particularly affected, with Ford Motor Company experiencing its largest single-day decline since February 2025.
Looking ahead to Wednesday, notable appearances include Senators Dave McCormick and Ted Cruz on CNBC’s “Squawk Box,” where they will delve into discussions surrounding the imminent government shutdown. Additionally, former Dallas Fed President Richard Fisher is expected to provide insights after the release of the Federal Open Market Committee’s minutes at 2 p.m. ET.
On the topic of artificial intelligence, Oracle shares fell more than 5% intraday, concluding down 2.5% for the day after reports indicated substantial financial losses related to the rental of Nvidia chips—amounting to nearly $100 million. Meanwhile, Nvidia has enjoyed a strong three-month performance, with share prices rising 17%, in stark contrast to the S&P 500’s 8% increase. Billionaire tech investor Orlando Bravo expressed concerns to CNBC, suggesting that valuations within the AI sector may have reached a bubble stage.
Tesla faced challenges as well, with its shares dropping 4% on Tuesday following the introduction of more affordable versions of its Model Y and Model 3 models. This decline followed a 5% increase on Monday, fueled by investor anticipation after the release of a teaser clip over the weekend. Hopes for updates on the highly-anticipated next-generation Roadster, which CEO Elon Musk has been promising for years, ultimately went unfulfilled.
The housing sector continues to struggle, particularly in the wake of President Donald Trump’s recent critique of homebuilders. The iShares U.S. Home Construction ETF (ITB) experienced significant losses, marking its worst two-day performance since early April. D.R. Horton suffered its worst day since October 2024, while other key players like Toll Brothers, KB Home, and PulteGroup also faced substantial declines. Investors will be keeping an eye on new mortgage application data due for release Wednesday, following a notable increase in refinancing activity observed last week.
As the market reflects on its significant recent gains, Wednesday also signifies six months since the market’s “tariff crash” low. Since that time, the S&P 500 has rebounded impressively, surging more than 30%. Among notable performers, Robinhood stands out as a top riser with a staggering increase of over 300%, while Molina Healthcare has faced a challenging period, experiencing a decline of 40%.
