US stocks closed on a month-high with both Dow and the S&P 500 ending the day at new record highs. The surge came despite Oracle weighing down Nasdaq, other major stock indexes climbed on Thursday.
Oracle shares take a plunge
Oracle dropped 10.8% after it missed Wall Street’s forecasts for revenue and profit and revealed it had spent $15 billion more than expected on AI, renewing worries that big tech stocks might be overpriced. The S&P 500’s technology sector also slipped, and Nvidia, which is one of the major AI players, fell 1.6%.
What helped widen the market’s gains?
Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email to Bloomberg that while Oracle dragged down the Nasdaq and tech stocks, areas like financials, industrials, and materials performed better. He explained that investors were responding to Jerome Powell’s softer remarks the previous day, which helped widen the market’s gains and boosted the Dow.
According to Bloomberg, Oracle and its peers have faced increased scrutiny lately because they are spending heavily on AI projects. Many analysts worry about how much these data centers cost and how long they will take to build at such a huge scale. Among the major tech firms, Nvidia slipped more than 1%, and Alphabet dropped 2.4%.
The market’s moves on Thursday followed the Federal Reserve’s decision the day before to cut interest rates for the third time in a row at its final meeting of 2025, where Fed Chair Jerome Powell also highlighted the continued strength of the US economy.
The report further added that after the market closed, Broadcom reported earnings and projected strong revenue for the current quarter, suggesting that demand for AI-related data center hardware is helping drive its growth.