ADDX GO Market Morning Wrap - 8th Oct
Stock Market
Overnight and into this morning, Oracle’s reported “lower-than-expected cloud business margins” weighed on the AI sector, which has fueled the U.S. market’s three-year bull run, dragging all three major indices lower.
At the close, the S&P 500 fell 0.38% to 6,714.59 points, ending a seven-day winning streak; the Nasdaq Composite dropped 0.67% to 22,788.36 points; the Dow Jones Industrial Average eased 0.2% to 46,602.98 points.
S&P 500 daily chart, source: TradingView
Reports suggest Oracle’s fast-growing cloud business generated slim profits over the past year, far below Wall Street expectations. Internal documents show that in the three months ending August, Oracle earned ~$900 million in revenue from renting Nvidia-powered servers, with a gross profit of $125 million—a margin of just under 14%.
Unspecified depreciation costs further eroded margins by 7 points, threatening Oracle’s overall ~70% gross margin as its cloud business expands rapidly.
The documents also reveal that Oracle’s cloud margins rely on older Nvidia chips, like the 2020 Ampere architecture, while newer Blackwell chips are squeezing profits.
In the three months ending August, Oracle lost nearly $100 million renting Blackwell chips, partly due to a lag between preparing data centers for clients and when clients start using and paying for them.
Oracle’s stock plunged over 6% intraday, closing down 2.52%. Though the drop was modest, it highlights the “one falls, all fall” dynamic among trillion-dollar tech giants. Nvidia gave back its near-2% gains, and CoreWeave dropped 8 points from its intraday high. Memory chip stocks like Micron, Seagate, and Western Digital, which had risen sharply recently, also saw high openings followed by pullbacks.
Oracle responded to the rumors, calling claims of struggles with Nvidia chip rentals “inaccurate.”
BMO strategists Ian Lyngen and Vail Hartman noted that markets have been debating overvalued stocks lately, but the key isn’t whether prices are too high—it’s whether the financial system can handle a sharp correction. Tuesday’s dip was more about tech pulling back due to AI cloud server margin concerns than a broad sell-off. They concluded that the stable Treasury market offers a chance for bond yields to rise amid stock volatility.
Global Hotspots
WTO Slashes 2026 Global Goods Trade Growth Forecast
On October 7, the World Trade Organization (WTO) released its latest *Global Trade Outlook and Statistics* report, citing strong demand for AI-related products, a pre-tariff import surge in North America, and active trade among emerging economies as drivers of stronger-than-expected global goods trade in the first half of 2025.
The WTO raised its 2025 trade growth forecast to 2.4% from 0.9% in August. However, due to weak global economic recovery and U.S. tariff policies, the 2026 forecast was sharply cut to 0.5% from 1.8%.
U.S.-Canada Leaders Meet at White House to Discuss Tariffs and More
On October 7, President Trump met with Canadian PM Carney at the White House to discuss trade and Gaza. Trump said serious talks on Gaza are underway, believing peace in the Middle East is possible. A deal, if reached, would be enforced rigorously by all parties.
Fire Disrupts 40% of U.S. Auto Industry’s Aluminum Supply, Imports Face 50% Tariffs
U.S. auto stocks fell on Tuesday after a fire halted production at a plant supplying 40% of the industry’s aluminum sheets, impacting automakers long-term. Importing alternatives now faces 50% tariffs.
France’s Political “Black Swan” Roils Markets, Bond Sell-Off Intensifies
France’s political turmoil continues to unsettle markets. The latest news is that new Defense Minister Bruno Le Maire resigned after PM Lecornu stepped down. Notably, Le Maire was only appointed on October 5.
U.S. Government Shutdown Hits One Week, Causing Flight Delays and Unpaid Air Traffic Controllers
As of October 7, the U.S. government shutdown reached one week. Since October 1, many federal workers have been furloughed without pay, economic data releases paused, and public services stalled, directly hitting the economy.
The shutdown is also straining air travel, with the FAA reporting staff shortages causing flight delays in California, New Jersey, Colorado, and elsewhere, as air traffic controllers work without pay.
Company News
Tesla Unveils “Streamlined” Model 3/Y
Tesla listed its long-teased “streamlined” Model Y on its website, alongside a surprise low-cost Model 3. The standard Model Y starts at $39,990, $5,000 cheaper than the previous base model; the standard Model 3 starts at $36,990, $5,500 less than the “Advanced Rear-Wheel Drive” version. Tesla’s stock plunged in late trading, closing down 4.45%, wiping out the previous day’s gains.
Trilogy Metals Soars on Trump Admin Investment and Project Approval
Small-cap miner Trilogy Metals surged 211% on Tuesday. On Monday, the Trump administration reversed Biden’s block on Alaska’s Ambler Road project and invested $35.6 million to support exploration in the Ambler mining district, gaining a 10% stake and warrants for another 7.5%.
The 211-mile road will ease access to copper, cobalt, gallium, and germanium deposits, previously blocked over caribou and fish concerns. The rare earth sector was active, with U.S. Antimony up 7.54%, U.S. Rare Earths up 7.41%, and TMC up 20.21%.
IBM Partners with Anthropic to Boost Enterprise AI Adoption
IBM rose 1.54% on Tuesday, hitting a record high.
The company announced a partnership with AI startup Anthropic to integrate its Claude model into internal and external development tools, launching an AI-first integrated development environment (IDE) focused on enterprise software development and modernization. Over 6,000 IBM employees are testing it, with some clients in private beta.
AI Server Demand Surges, Dell Doubles Growth Forecast
AI server maker Dell rose 3.51% on Tuesday. The company expects annual sales to grow 7%–9% over the next four years, with adjusted EPS growing 15% or more. In 2023, Dell had projected 3%–4% revenue growth and 8%+ adjusted EPS growth.
J&J Ordered to Pay Record $966 Million in Talc Cancer Case
A California jury ruled Monday evening that Johnson & Johnson is liable for Mae Moore’s mesothelioma, a cancer linked to asbestos exposure, ordering $16 million in compensatory damages and $950 million in punitive damages. Moore passed away in 2021; her family will receive the payout.
The $966 million is the largest single-plaintiff award in talc litigation. In 2018, a Missouri jury awarded $4.7 billion to 20 women, later reduced to $2.1 billion on appeal, with J&J paying $2.5 billion including interest.
Forex & Commodities
Spot gold continued climbing, hitting a record $3,992 per ounce, just shy of the $4,000 milestone. NYMEX Comex gold futures crossed $4,000 on Tuesday. Goldman Sachs raised its end-2026 gold forecast from $4,300 to $4,900, citing sustained ETF inflows and potential central bank buying.
The U.S. government shutdown entered its seventh day, delaying multiple economic reports. Kalshi’s latest data suggests this shutdown could last over 20 days.
Oil prices were mixed on October 7. NYMEX WTI crude futures rose $0.04 to $61.73 per barrel (+0.06%); Brent crude futures fell $0.02 to $65.45 per barrel (-0.03%).
The dollar index rose 0.48% on October 7, closing at 98.578 in late forex trading.
Key Events
Dalio Recommends 15% Gold Allocation, Likens Current Climate to Early 1970s
At Tuesday’s Greenwich Economic Forum, Ray Dalio endorsed the view that “gold is a better safe haven than the dollar” and suggested investors allocate 15% of portfolios to gold.
The investing legend compared 2025 to the early 1970s, stressing the need to think about wealth preservation and asset allocation from a value-storage perspective.
Cryptocurrency
Bitcoin fell 2.46% in 24 hours to $121,706.
Ethereum (ETH-USD) dropped 4.68% to $4,459.37.
XRP (XRP-USD) fell 3.90%, BNB (BNB-USD) rose 7.64%, Solana (SOL-USD) fell 5.06%.
Dogecoin (DOGE-USD) dropped 6.37%, Cardano (ADA-USD) fell 5.72%.
Key Events
Citadel Founder Worried About “Debasement Trade” in Gold, Silver, and Bitcoin
In a Bloomberg interview, Citadel founder Ken Griffin expressed concern over investors piling into gold, silver, and Bitcoin this year, a trend dubbed the “debasement trade” as markets seek safer assets than the dollar.
Griffin said, “We’re seeing significant price increases in non-dollar assets as investors try to de-dollarize or reduce exposure to U.S. sovereign risk.”