Major U.S. stock indexes were mixed on Thursday as investors reacted to fresh concerns in the artificial intelligence sector. Technology shares fell sharply after Oracle issued a warning about AI profitability. At the same time, the dollar and U.S. Treasury yields continued to decline following the Federal Reserve’s rate cut and its less-hawkish guidance.
The Nasdaq dropped to a one-week low in early trading. The S&P 500 edged slightly lower, while the Dow moved higher and extended its strong gains from Wednesday’s Fed-driven rally. Global stocks also showed modest increases.
Oracle Sparks New AI Jitters
Oracle reignited anxiety over expensive tech valuations after missing Wall Street expectations for revenue and profit. The company also revealed a $15 billion overspend tied to AI investment. Oracle shares fell 13.1%, dragging the S&P 500 tech sector down more than 1%. Nvidia shares slid 3.4%, while Broadcom dropped 4.4% ahead of its quarterly earnings release.
Japan’s Nikkei also lost nearly 1% overnight as SoftBank — Oracle’s partner on the U.S. Stargate data center project — plunged more than 7.5%.
Michael O’Rourke, chief market strategist at JonesTrading, said Broadcom’s results will keep AI sentiment in focus. He added that the market is holding up relatively well given Oracle’s steep decline but noted that investors remain cautious.
Investors Watch the Interest Rate Outlook
Markets continued to digest the Federal Reserve’s rate cut. The Fed lowered its benchmark rate by 25 basis points to a range of 3.5% to 3.75% in a 9–3 vote. Fed Chair Jerome Powell emphasized a balanced approach during his press conference and said a rate hike is not anyone’s “base case.” Futures markets now expect at least two cuts next year.
The Dow rose 1.00% to 48,539.65. The S&P 500 slipped 0.28% to 6,867.70, while the Nasdaq fell 0.96% to 23,427.35.
MSCI’s global stock index gained 0.05%, and Europe’s STOXX 600 rose 0.7%.
Dollar and Treasury Yields Extend Declines
The U.S. dollar weakened further, hitting multi-month lows against the euro, sterling, and Swiss franc. The franc gained support after the Swiss National Bank held rates steady. The dollar fell 0.7% against the franc to 0.7946, while the euro climbed 0.4% to $1.1737. The dollar index dropped 0.41% to 98.18.
Treasury yields fell for a second day following the Fed’s policy announcement. The central bank also revealed that it will begin buying short-dated Treasury bills on Friday, with an initial $40 billion round — earlier and larger than markets expected.
The 10-year Treasury yield fell 4.8 basis points to 4.116%, on track for its biggest two-day decline in two months. The two-year yield fell by the same amount to 3.518%.
In Europe, German 10-year Bund yields eased to 2.84% after hitting a nine-month high earlier in the week.
Oil and Gold Move in Opposite Directions
Oil prices continued their decline. U.S. crude fell 1.78% to $57.42 per barrel, while Brent slipped 1.69% to $61.16.
Gold moved higher, with spot prices up 0.55% to $4,251.08 an ounce.
