The S&P 500 reached a record high on Thursday despite concerns about AI stocks. The Dow Jones Industrial Average rose 646 points, or 1.3%, closing at an all-time high of 48,704.01. However, gains were tempered by Oracle’s sharp increase in capital expenditure outlook for fiscal 2026, which raised doubts about its ability to convert massive AI expenditures into revenue.
Oracle’s slump cooled investor sentiment on AI stocks, with NVIDIA Corporation and Alphabet Inc Class A leading the decline. In contrast, Adobe Systems issued better-than-expected annual revenue and profit guidance, suggesting that its AI-enhanced offerings are becoming more lucrative.
Other stocks also saw gains, including Walt Disney, which rose after announcing a major partnership with OpenAI, and Eli Lilly, whose next-generation obesity drug showed promising results in a late-stage trial. The US Federal Reserve cut interest rates by 25 basis points, and Chair Jerome Powell outlined a higher bar for future rate cuts.
The trade deficit unexpectedly narrowed in September, contracting 10.9% to $52.8 billion, which could have boosted economic growth in the third quarter. Despite these positive indicators, AI concerns remain a concern for investors.
Source: https://www.investing.com/news/stock-market-news/wall-st-futures-dip-as-oracle-tumble-ai-doubts-offset-dovish-fed-signals-4402136