Could Be A “Canary In The Coal Mine” For The Stock Market
Tom Essaye said that cheap AI stock valuations could signal that investors are growing fearful that the data center boom could come to a halt.
Why Oracle’s recent credit downgrade could be a warning sign for stocks
According to Tyler Richey, a technical analyst at Sevens Report Research, it could be a “canary in the coal mine” for the stock market.
The ratings agency cut Oracle’s rating from BBB, citing heavy infrastructure spending and it’s high exposure to OpenAI as risks to its ability to meet its debt obligations. While the news went relatively unnoticed in the stock market, Sevens Report says equity investors should pay attention, as it could be an early warning of bigger issues on the horizon.
“ORCL very well may turn out to be the first of the mega-cap-tech ‘Hyperscalers’ to be rolling over into what could (and is increasingly likely to) prove to be the early stages of a longer-term, cyclical bear market for equities,” Richey wrote in a July 13 client note.
“A higher trending junk bond yield index with stocks trading near all-time highs is a troublesome combination,” Richey said.
“Bottom line, the ORCL downgrade last week served as a stark reminder that critical signals from the bond market can be subtle at first, but offer both fair warning of a potential downturn, and a rare opportunity to take action to protect principle in riskier equity and bond market holdings,” Richey said.
Also, click here to view the full article published in Business Insider on July 17th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.
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