Stocks declined on Wednesday as investors continued to rotate out of key artificial intelligence names, sparked by a report that Oracle’s primary investor pulled out of one of its data center projects.
The Dow Jones Industrials dumped 228.10 points to finish Wednesday at 47,886.16.
The S&P 500 dropped 78.75 points, or 1.2%, to 6,721.51.
The NASDAQ tumbled 418.14 points, or 1.8%, to 22,693.23.
Once-hot AI stock Oracle dropped 5% after the Financial Times reported that Blue Owl Capital’s plans to finance the cloud infrastructure company’s $10-billion Michigan data center fell through, with people familiar with the matter pointing to concerns about Oracle’s debt and spending levels. Oracle has since disputed the report and said the project is moving forward.
Risky financing schemes tied to companies’ data center buildout plans have kept investors on edge in recent weeks. The spotlight on Oracle during the session comes after the company just last week refuted a Bloomberg report that said it had delayed some projects for OpenAI to 2028.
Other stocks tied to the AI trade fell in sympathy on Wednesday. Chipmaker Broadcom — another stock that has led the recent rotation out of tech — lost 4%. Nvidia lost 3%, while Advanced Micro Devices lost 5%. Google parent Alphabet declined 3%.
The U.S. Bureau of Labor Statistics released early Tuesday its November job report, which also included data from October. The findings pulled back the curtain on the U.S.' economic health following a federal data backup caused by the U.S. government shutdown this fall.
The report showed the U.S. economy shed 105,000 jobs in October, while the unemployment rate rose to 4.6% — its highest level since September 2021. However, 64,000 jobs were added in November, topping the Dow Jones consensus estimate of 45,000.
On the economic front, Federal Reserve Governor Christopher Waller and New York Fed President John Williams are slated to speak on Wednesday morning.
Traders are also looking ahead to Thursday’s release of the consumer price index reading for November.
Prices for the 10-year Treasury listed lower, raising yields to 4.16% from Tuesday’s 4.15%. Treasury prices and yields move in opposite directions.
Oil prices recovered $1.38 to $56.65.
Gold prices bounced $43.20 to $4,375.50.
