Stocks close lower for a third day as once-hot AI play Oracle falls, yields increase
All three major U.S. indexes ended Thursday in the red, bogged down by a further pullback in Oracle, as well as a jump in rates.
The S&P 500 closed down 0.50% at 6,604.72, as did the Nasdaq Composite, which settled at 22,384.70. The Dow Jones Industrial Average shed 173.96 points, or 0.38%, to finish at 45,947.32.
Oracle slid 5%, putting the stock on track to post a third straight day of losses, as questions over the state of the artificial intelligence trade lingered. The market action appears to be reflecting concerns about record-high valuations and potentially risky circular relationships in the AI industry after some recent deals.
Through Thursday’s close, Oracle, which led the latest leg of the bull market, is off nearly 16% from its recent high. Thursday’s decline was partly driven by a sell rating issued in new coverage by Rothschild & Co. Redburn, which predicted a 40% pullback because the “market materially overestimates” how much Oracle’s recent AI deals will boost the company’s core cloud business.
Alongside Oracle, Tesla was among the day’s laggards, falling 4%.
A jump in yields added to the selling in tech shares, causing investors to take off some risk. The 10-year Treasury yield touched 4.2% after data on initial claims for unemployment insurance came in lower than expected.
Source : Cnbc.com
