US stocks opened mixed on Thursday as Oracle’s troubling earnings report spooked investors despite the Federal Reserve’s dovish rate cut just a day earlier.
The S&P 500 fell 0.3%, unable to hold Wednesday’s momentum near record highs, while the tech-heavy Nasdaq Composite retreated 0.7%, reflecting broader concerns about AI spending sustainability.
The Dow Jones Industrial Average bucked the trend with a 0.6% gain, buoyed by financials and industrials less exposed to technology’s valuation pressures.
Oracle’s 15% plunge after warning of another massive $15 billion data center spending surge reignited fears that the AI boom’s costs are outpacing returns.
What happened in pre-market trading today?
The stock futures stumbled Thursday morning as Oracle’s disappointing earnings report reignited fears about the artificial intelligence spending spree.
The cloud-computing giant’s stock cratered over 12% in premarket trading after revealing that capital expenditures would balloon to roughly $50 billion by May 2026.
Oracle’s miss wasn’t catastrophic on paper; quarterly revenue of $16.06 billion barely undershot analyst expectations of $16.21 billion.
But in a market priced for perfection, even a small slip can trigger selling.
Other technology stocks bled in sympathy. Nvidia dipped 1.5%, Micron fell 1.4%, AMD dropped 1.3%, and Microsoft declined 0.9%.
CoreWeave, a cloud computing player, plunged 3%. Even Adobe came under pressure after issuing disappointing fiscal 2026 guidance.
The volatility highlighted investor anxiety that AI investments might take longer to generate returns than initially hoped.
Meanwhile, weaker-than-expected labor market data arrived early Thursday, with jobless claims rising above expectations. The VIX climbed to 16.13 as traders braced for potential turbulence heading into the final weeks of the year.
US stocks bracing for volatility
Investors should brace for a volatile session as traders wrestle with competing narratives.
Oracle’s shocking capex guidance overshadows the Fed’s dovish rate cut from yesterday, creating tension between relief and caution.
The investors will keep a close eye on the labor market.
The unemployment picture matters more than ever since the Fed signaled it’s likely done cutting rates for now.
If jobs data disappoints, you could see a brief relief rally as recession fears creep back. Conversely, strong claims would reinforce the Fed’s “stay patient” message.
Broadcom and Costco report after hours, another reminder that earnings season is far from over.
Broadcom’s results are particularly significant for the AI trade; any weakness would reconfirm that investors are questioning whether massive capex spending actually translates to profits soon.
Tech stocks will remain in focus, but don’t be surprised if defensive plays outperform today. Volatility breeds rotation, and that usually favors steadier dividend payers over growth names already nursing losses.
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