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U.S. stocks were set to open in the red on Thursday as earnings from software and cloud-computing company Oracle sparked concerns about the artificial-intelligence trade. That looked to be outweighing the boost received from the Federal Reserve’s latest interest-rate cut.
Dow Jones Industrial Average futures were down 224 points, or 0.5%. S&P 500 futures were falling 0.9% and Nasdaq 100 futures were dropping 1.2%.
Those moves were the opposite of the previous day when investors cheered the Fed decision and the Dow added 1%, notching its best performance on a Fed-decision day since 2023, while the S&P 500 narrowly missed out on a record high.
The tech-heavy Nasdaq was leading losses with AI stocks falling in sympathy with Oracle. The company’s guidance came in short of estimates and it raised its spending forecast. Oracle shares fell as much as 11% in after-hours trading on Wednesday.
“As with most of the big tech names, capex continues to ramp up and exceed the Street’s expectations, weighing heavily,” said Ryan Lee, senior vice president of product and strategy at Direxion.
The Federal Reserve’s rate-setting committee voted Wednesday to reduce the benchmark federal-funds rate by a quarter point—to between 3.5% and 3.75%, a three-year low. The Fed voted 9-3, the first time in six years that three officials cast dissents. Two officials preferred to hold rates, while another favored a larger, half-point cut.
Fed Chair Jerome Powell said the labor market “seems to have significant downside risks,” a message many investors welcomed as a dovish signal. However, the majority of officials penciled in no more than one reduction next year in economic projections accompanying the decision.
“The Federal Reserve’s rate cut Wednesday was much less hawkish than expected, which drove stocks higher as investors realize that even with the possibility of fewer rate cuts in 2026, the likely path for rates is still slightly lower from current levels, and not higher,” said Chris Kampitsis, managing partner at Barnum Financial Group.
The yield on the benchmark 10-year Treasury note stood at 4.138% early on Thursday, ticking down from the previous day.
