NEW YORK — Wall Street's record-setting rally finally hit a speed bump on Tuesday as the price of gold surged past $4,000 per ounce for the first time, prompting investors to reassess risk. The S&P 500 slipped 0.4%, ending a seven-day winning streak, while the Dow Jones Industrial Average fell 91 points (0.2%) and the Nasdaq composite dropped 0.7%.
Gold Hits Record High
Gold’s historic move has been fueled by a mix of inflation concerns, global political instability, and expectations of lower interest rates from the Federal Reserve. The metal has already gained more than 50% this year, cementing its role as a hedge for investors wary of mounting government debt and economic uncertainty.
"Optimists are buying tech stocks, pessimists are buying gold — and some are buying both," said Thierry Wizman, strategist at Macquarie Group.
Market Movers: Tesla, Oracle, and AI Frenzy
The broader market’s pullback was led by Tesla (TSLA), which tumbled 4.4% after unveiling cheaper versions of two electric vehicle models. The decline erased much of the prior day’s rally, when speculation swirled around a potential product announcement.
Oracle (ORCL) also weighed on the indexes, sliding 2.5% after reports suggested thin profit margins in its artificial intelligence-related business.
Still, AI enthusiasm continued to buoy other names:
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Dell (DELL) rose 3.5% after executives highlighted AI-driven growth opportunities.
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Advanced Micro Devices (AMD) gained 3.8%, extending Monday's rally after announcing a deal with OpenAI to supply chips for AI infrastructure.
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IBM (IBM) added 1.5% on news it will integrate Anthropic's Claude AI chatbot into its software products.
The AI boom has been one of the strongest drivers of Wall Street’s record run, though some analysts warn valuations may be running ahead of fundamentals.
Other Notable Movers
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Intercontinental Exchange (ICE) rose 1.8% after pledging up to $2 billion in investment for Polymarket, a prediction market platform.
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Constellation Brands (STZ) gained 1% after quarterly results topped expectations, though beer sales fell year-over-year amid what CEO Bill Newlands called a "challenging socioeconomic environment."
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In Toronto, Trilogy Metals (TMQ) shares more than tripled after the White House announced a 10% equity stake and approved a controversial 211-mile road project in Alaska to support mining of copper, cobalt, and gold.
Global and Bond Market Moves
In Europe, France’s CAC 40 edged up less than 0.1% after political turmoil in Paris, where the prime minister resigned on Monday.
In the bond market, the 10-year U.S. Treasury yield eased to 4.13% from 4.18%, reflecting a modest flight to safety as gold prices spiked.
The Bottom Line
After a relentless climb since April, U.S. stocks finally paused as investors weighed the historic surge in gold against ongoing optimism around AI-driven growth and Fed rate cuts. With the S&P 500 still near record highs, the split between risk-taking in tech and hedging in gold underscores the market’s uneasy balance between hope and caution.