U.S. stocks traded mixed on Thursday as investors weighed disappointing earnings from Oracle and fresh labor market data, following the Federal Reserve’s latest interest rate cut.
At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average rose 266 points, or 0.6%. The S&P 500 slipped 22 points, or 0.3%, while the NASDAQ Composite fell 145 points, or 0.6%.
Fed Cuts Rates and Signals Another Reduction Next Year
The Federal Reserve lowered rates by 25 basis points on Wednesday, marking its third cut of the cycle. The move was widely expected. However, Chair Jerome Powell delivered a more measured tone than anticipated. He emphasized a higher bar for future cuts and stressed that decisions will remain data-dependent.
Powell also announced that the Fed will begin buying short-dated Treasury bills immediately to boost market liquidity, with purchases starting at about $40 billion per month.
Fed policymakers projected one additional rate cut next year, although the December vote showed notable divisions inside the central bank.
ING analysts James Knightley and Padhraic Garvey said the cooling labor market raises the risk of more rate cuts than currently projected.
New jobless claims reflected this shift. Initial claims rose to 236,000 last week, up from a revised 192,000. Economists expected 220,000. While some analysts blamed holiday-related adjustments, others said the numbers still point to a stable, but easing, labor market.
The U.S. trade deficit also narrowed sharply in September, falling 10.9% to $52.8 billion—its lowest level since June 2020. Stronger exports helped offset a modest rise in imports, suggesting trade supported third-quarter growth.
Oracle Slumps on Rising Spending and Debt Concerns
Oracle stock fell sharply after the company raised its capital spending forecast for fiscal 2026. The update increased worries about how the firm plans to turn heavy AI investments into meaningful revenue. Concerns also grew over Oracle’s expanding debt load after issuing billions in bonds and notes this year.
Adobe, however, offered relief to tech investors. The company issued stronger-than-expected guidance for annual revenue and profit, signaling progress in monetizing its AI-enhanced software tools.
Disney shares also traded higher after announcing a major partnership with OpenAI. The deal includes a $1 billion investment and licensing of Disney characters for OpenAI’s Sora video-generation platform.
Eli Lilly gained as well after reporting that its next-generation obesity drug led to an average weight loss of 28.7% in late-stage trials, outperforming its blockbuster treatment Zepbound.
Oil Prices Pull Back
Oil prices moved lower on Thursday, giving back gains from the previous session. The decline came after the U.S. seized a sanctioned tanker off the coast of Venezuela, raising concerns over potential supply disruptions.
Brent crude fell 1.9% to $61.03 a barrel. West Texas Intermediate dropped 2% to $57.28 a barrel.
Prices had climbed on Wednesday after the tanker seizure injected a supply-risk premium into the market.
The International Energy Agency added another twist to the outlook, raising its forecast for global oil demand next year while trimming expectations for supply growth. The revision points to a narrower surplus in 2026.
