Advertisment
The Dow Jones Industrial Average and S&P 500 reached new heights on Thursday as a Federal Reserve interest rate cut followed by disappointing Oracle results prompted investors to move out of high-flying tech stocks and into names that can benefit from a growing U.S. economy.
The 30-stock index leaped 640.12 points, or 1.3%, to conclude Thursday at 48,697.87, boosted by a rise in Visa shares after the name was upgraded at Bank of America.
The much-broader index recovered 14.31 points to 6,900.99.
The NASDAQ ducked 60.3 points to 23,593.86.
Oracle shares tumbled 11% after the cloud computing company posted disappointing quarterly revenue and raised its spending forecast, heightening concerns about the company’s debt.
The report added more fuel to the debate about how quickly tech companies will be able to see returns on their artificial intelligence investments, spurring a rotation trade. Other AI plays were trading lower, including Nvidia and Broadcom, which were each down 1%.
Meanwhile, cyclical stocks like Home Depot were higher, including Nvidia, Broadcom, AMD and CoreWeave, which were each down 2%.
The report added more fuel to the debate about how quickly tech companies will be able to see returns on their AI investments. Other AI plays were also trading lower in extended trading, including Nvidia, dipping 3% and AMD, which was down 4%. CoreWeave fell 6%.
Those moves put a damper on the momentum garnered during the previous session, which saw the S&P 500 close just inches away from a new record after a divided Fed announced an interest rate cut for the third time this year and ruled out a rate hike.
The central bank’s Federal Open Market Committee cut its key overnight borrowing rate by a quarter percentage point to a 3.5%-3.75% range and signaled a slower pace of rate cuts ahead.
Prices for the 10-year Treasury were down Thursday, raising yields back to Wednesday’s 4.15%. Treasury prices and yields move in opposite directions.
Oil prices slumped 67 cents to $57.79.
Gold prices brightened $78.50 to $4,303.20.
