Mixed Results in US Stock Market
On Thursday, US stock markets displayed a mixed trend as Oracle’s share price dropped significantly, raising concerns about excessive spending in technology, particularly in AI.
Impact on Major Indices
The Nasdaq Composite and S&P 500 indices fell by 1% and 0.3%, respectively, retracing gains from the previous day’s Wall Street rally, which had been spurred by the Federal Reserve’s recent interest rate cut.
Dow Jones Holds Steady
In contrast, the Dow Jones Industrial Average, which contains fewer technology stocks, managed to gain 1% as it continued the broader market’s upward momentum following the Fed’s decision.
Oracle’s Earnings Report Concerns
Oracle’s earnings report released late Wednesday reignited fears of overspending in AI as the company missed expectations on cloud sales and increased its data center expenditures by $15 billion. The shares experienced a steep decline of up to 16% amidst renewed anxieties about tech valuations and potential debt concerns.
Jobless Claims Signal Economic Concerns
The market’s focus also shifted to a weekly jobless claims report, which came in above expectations at 236,000, marking the highest level since 2020. This data follows a three-year low observed during Thanksgiving week, adding further uncertainty to the economic outlook.
Trade Deficit Narrows Unexpectedly
The trade deficit in the US surprisingly narrowed to its lowest level in over five years due to a surge in exports, which could have positive implications for the broader economy.
Upcoming Earnings Reports
As the week progresses, earnings announcements from companies like Broadcom, Costco, and Lululemon are imminent, with investors keen to glean insights from these reports amidst existing market volatility.
