S&P 500 heads for first decline in 8 days on Oracle slide, shutdown angst

The S&P 500 struggled on Tuesday, bogged down by a drop in Oracle shares amid investors' worries about the profitability of the artificial intelligence rollout. Wall Street also looked for more developments out of Washington on the current U.S. government shutdown that is now in its second week.

The broad market index pulled back 0.5%, while the Nasdaq Composite fell 0.8%. The Dow Jones Industrial Average fell 176 points, or 0.4%.

Oracle led a decline in tech stocks after The Information reported that the software company is generating much lighter margins on its cloud business than analysts currently estimate and that it is losing money on some of its deals for rental of Nvidia chips. Oracle shares lost more than 3%, and the Nasdaq hit its low of the session as a result of the news.

"There's a lot of interest in capex spending and making sure that you're first or you have the ability to source the technology you need to grow profits in this new AI realm," Ameriprise's chief market strategist Anthony Saglimbene told CNBC. "Investors, at some point, will look at how much money is being spent and say, 'What's the return on investment?'"

"It doesn't mean that AI is in a bubble. It just means that there's probably some opportunity for a little bit of reset in expectations, particularly about the results and profitability that come from just this enormous amount of money that's being thrown into AI right now," he continued.