The Nasdaq Composite fell Tuesday after Oracle shares plunged on disappointing results, and tech stocks came under pressure.
Oracle shares posted their worst day since 2002. The software stock was the worst performer in the S&P 500, sliding 13.5% after sales last quarter fell short of estimates and the company's revenue forecast also disappointed. Oracle posted its fiscal first-quarter results late Monday. Other cloud competitors — including Amazon, Google-parent Alphabet and Microsoft — also slid.
"Oracle, which isn't a super large stock, but it is a look into the spending of businesses — and larger businesses at that — disappointed today, and that's one of the factors that are suppressing both the NASDAQ and the S&P," said Kim Forrest, founder at Bokeh Capital Partners.
Elsewhere, U.S. crude prices touched the highest level since November of last year as OPEC on Tuesday kept to a robust demand growth forecast this year and next. West Texas Intermediate crude oil futures settled at $88.84 a barrel. That's up from around $66 a barrel in March. Energy stocks got a boost. Shares of Chevron and Exxon Mobil were each higher by about 1.9% and 2.9%, respectively.
Much attention is focused on key inflation data due later in the week, with the consumer price index expected Wednesday and the producer price index slated for Thursday. The European Central Bank is also set to announce its latest interest rate decision Thursday.
Correction: An earlier version misstated the implications of the CME FedWatch Tool.
All seven of the "Magnificent 7" tech stocks retreated on Tuesday, led by Tesla, which sank 2.2%, followed by Meta Platforms, off 1.9%, Microsoft and Apple, both down 1.8%, Amazon, down 1.3% and Alphabet, which fell 1.2%.
The only member of the group to outperform the Nasdaq Composite 1% loss was Nvidia, which retreated 0.7%.
— Scott Schnipper
DoubleLine Capital CEO Jeffrey Gundlach said the Federal Reserve's tightening cycle should come to an end as the economy slows down further.
"I think they are done," Gundlach said at the Future Proof conference Tuesday at Huntington Beach, California. "We have enough economic weakness."
The bond king said the core Personal Consumption Expenditures Price Index has been consistently high, but as soon as it drops below 4%, the central bank should stop raising rates definitively.
— Yun Li
Wall Street sees a handful of positives coming out Disney's deal with Charter Communications, settling a dispute that left millions of customers without access to some of the entertainment company's programming.
As part of the deal, Disney's ad-supported streaming apps Disney+ and ESPN+ will be included in packages for some of Charter's Spectrum pay TV customers.
Morgan Stanley analyst Benjamin Swinburne views the agreement as a value adder to the linear bundle and one that puts Charter back into the video business. It also expands content access for Charter customers while increasing the distribution of Disney's content and growing advertising video on demand.
"A better video product could lead to a more modest rate of cord-cutting, benefiting both Disney and Charter," he wrote, adding that the agreement creates a "template" for the direct-to-consumer launch of ESPN.
Needham's Laura Martin calculates that Disney's deal with Charter should add $420 million to the entertainment company's revenues in 2024, with Charter accounting for about 4% of total revenues.
"The appearance of normalcy and survival of the American dream (via its biggest sport) was an important symbol, she wrote. "Business is business, unless eclipsed by a bigger idea, is our key takeaway."
— Samantha Subin
Stocks were down across the board in the final hour of trading. The Nasdaq Composite hit its lows of the session, falling more than 1%. Meanwhile, the Dow Jones Industrial Average turned negative, last down about 26 points, or 0.08%. It was positive earlier in the session.
The S&P 500 was down about 0.6%.
— Sarah Min
U.S. automaker General Motors could see earnings squeezed in the event of a prolonged United Auto Workers strike, according to Jefferies.
"GM looks most at risk in the event of a prolonged strike given low inventories (378k units and 17 days below August 2019 levels) and continuing production challenges," analyst Philippe Houchois wrote in a Monday note. "We assume 28-30% fixed costs, yielding a weekly shortfall of c.$500m or 3-4% FY23E adjusted group EBIT [earnings before interest and taxes]."
Still, shares were higher by more than 2% late Tuesday afternoon.
— Brian Evans
Truist analyst Jordan Levy turned less bullish on Enphase Energy and slashed his expectation for shares amid concerns over a recovery in the U.S. residential market.
Levy downgraded the stock to hold from buy and cut his price target to $135 from $210. Still, his new target implies an upside of 10.4%. The stock was higher by less than 1% in afternoon trading.
"While we expect ENPH to play a meaningful role in the theme of home electrification over the coming years, we see potential for a prolonged recovery in U.S. resi solar/storage acting as a headwind to shares in coming quarters," Levy said in a note to clients Monday.
— Alex Harring
Bank of America reiterated its buy rating on AstraZeneca on Tuesday, highlighting the pharmaceutical stock's "attractive valuation" and calling it the "best pipeline in the sector."
The U.S. traded shares of the company gained more than 1% on Tuesday.
"We think the next 12-18m goes a long way to resolving" the debate on the durability of growth, Bank of America's Sachin Jain said in a note. Higher pipeline forecasts are driving sales growth estimates, he added.
— Tanaya Macheel
Artificial intelligence may only be in its early stages but Barclays is laying out some of its favorite potential winners in the space.
"We think it's too early to make any strong declarations around the "AI winners/losers basket,' wrote analyst Ross Sandler in a Tuesday note to clients. "Instead, we have tried to come up with a framework that can be applied today to assess winners and losers as things play out."
Some of those names that screen well include Alphabet and Meta Platforms due to their "strong technical AI prowess" and available resources to aggressively invest in the technology. Both companies also boast billions of users strong pipelines of AI-related talent.
Amazon is another potential winner due to Amazon Web Services' hyperscale position among everything from startups to large enterprises. The company has also been harnessing AI to improve its e-commerce business.
"Amazon's physical asset investments in logistics and fulfilment should also prove to be an effective barrier from some of the disruption we expect to see as new Gen AI start-ups enter e-commerce," Sandler said.
— Samantha Subin
Investors may be eagerly anticipating that slowing inflation and the September rate pause means the end of the Federal Reserve's hiking cycle, but Mohamed El-Erian believes they're getting too far ahead of themselves.
"The marketplace assumes that the Fed is going to be able to cut rates early next year," Allianz's chief economic advisor told CNBC's "Squawk Box" on Tuesday. "I don't think that's going to happen."
Instead, El-Erian believes it's likely that both core and headline inflation put up a harder fight than expected on the way down. With that in mind, investors will be forced to grow comfortable with inflation persisting above its traditional 2% target, he said.
— Lisa Kailai Han
Sporting equipment company Bombardier Recreational Products is the best bet in the outdoor powersports space, according to Citi.
Analyst James Hardiman upgraded the stock to buy from neutral on Tuesday and raised his price target to $128. Shares of the company, which produces ATVs and Sea-Doo snowmobiles and jet skis, have dropped 8.7% this quarter. The stock added 3% during Tuesday's trading session.
CNBC Pro subscribers can read more here.
— Pia Singh
The U.S. listed shares of BP rose 1.8% in afternoon trading after the Financial Times reported Tuesday, citing sources, the energy giant's chief executive is set to resign.
Bernard Looney took over as CEO of BP in 2020 after previously leading the company's Upstream group. When the move was announced, board chair Helge Lund praised Looney as the right choice to lead BP into an era of energy transition.
— Sarah Min, Jesse Pound
Apple stock slipped 1.8% Tuesday after the company unveiled the iPhone 15 at its "Wonderlust" launch event in Cupertino.
The latest handset in the popular iPhone line of smartphones boasts a 48 megapixel main camera, the A16 Bionic chip and 4K cinematic mode. The iPhone 15 is also made with 75% recycled aluminum and 100% recycled copper. The iPhone 15 will start at $799 for the base model, $999 for the Pro and $1199 for the Pro Max.
— Brian Evans
With the S&P 500 trading near David Kostin's year-end target of 4,500, the Goldman Sachs chief U.S. equity strategist believes that there's a chance it could prove to be too conservative.
"The upside potentially would be that rates fall a little bit," Kostin told CNBC's "Squawk On the Street" on Tuesday. Historically, lower rates have led to valuation expansions.
Better-than-expected earnings would also be another catalyst that could send stocks past Kostin's year-end forecast, he added.
In the next several months, Kostin expects stocks to trade sideways with perhaps some slight near-term weakness. His 12-month forecast has the S&P 500 climbing to 4,700, which he called a "modest" expectation in this environment.
— Lisa Kailai Han
Goldman Sachs thinks late-stage biotech company Geron was due for a correction and now has the potential to surge higher.
Analyst Corinne Jenkins upgraded Geron to buy from neutral and maintained her current price target. She highlighted FDA acceptance of Geron's new drug application for imetelstat, a treatment for individuals with transfusion-dependent anemia in lower-risk myelodysplastic syndromes, or MDS.
"We maintain our view that imetelstat is likely to be approved in this setting, where we estimate $1.5 billion in unadjusted peak sales," Jenkins wrote in a Monday note. "We see the recent pullback in shares as presenting a buying opportunity for the stock."
However, shares dipped more than 1% in afternoon trading. CNBC Pro subscribers can read more here.
— Pia Singh
BMO Capital Markets analyst Keith Bachman on Tuesday raised his target price on Adobe to $640, implying 13.4% upside for the stock. The analyst maintained his outperform rating.
"We remain confident that generative AI can help Adobe grow net new ARR over the next several years, which should support durable mid- to low-teens revenue growth," Bachman said in a Tuesday note. "We believe that Adobe's strategy will include price increases of 10% to 15%, though lower at the consumer level, and adding new users in all categories."
Wells Fargo on Monday similarly kept its overweight rating and raised its price target to $625, saying it sees a "fairly straightforward setup" into the third fiscal quarter. Adobe's MAX creativity conference in October is the more meaningful catalyst for shares, the firm said, expecting the company to highlight its generative AI capabilities across the Creative Cloud product suite.
The stock has skyrocketed in recent months, gaining more than 63% so far this year. Shares are trading 2.9% lower on Tuesday, ahead of Adobe's earnings due Thursday after market close.
— Pia Singh
Information technology was the biggest laggard in the S&P 500, with the sector last down by 1.2%. Oracle dragged on the sector, dropping more than 12%. Apple shares lost 1.5%.
However, some semiconductor stocks such as Nvidia and Qualcomm were higher by 0.4% and 1.2%, respectively. Intel shares rose 1.9% after the chip company said it would sell a roughly 10% stake in its IMS Nanofabrication business to TSMC.
— Sarah Min
Shares of Advance Auto Parts fell to a low not seen in more than a decade on Tuesday following a credit downgrade.
S&P Global downgraded the auto parts provider's credit rating to BB+, the highest level of "junk," or speculative, status. The firm previously had a BBB- rating.
Shares were down more than 7% midday. The stock traded at a price not seen since 2011.
— Alex Harring
These are some of the stocks making the biggest midday moves:
— Alex Harring
The energy sector outperformed Tuesday as U.S. crude prices hit their highest point since November 2022.
The financials and industrial sectors were the only other industries that were positive as of midday Tuesday. The Financial Select Sector SPDR Fund ticked up 0.8%, while the Industrial Select Sector SPDR Fund traded near the flatline.
— Hakyung Kim