Dow, Nasdaq, S&P Slide as Oracle Earnings Shock Sends AI Stocks Tumbling

Overnight, U.S. stock futures saw a decrease with all three, Dow, S&P 500, and Nasdaq futures bearing the brunt of the drop, with Nasdaq leading the way downwards. Oracle (ORCL) market price fell drastically due to the company's reporting of mixed fiscal Q2 earnings and a hike in capital expenditure, resulting in a domino effect on the other companies that are AI-focused.

The first half of Wednesday's trading day was bright after the Federal Reserve's third successive rate cut, further boosted by Fed Chair Jerome Powell's remarks. Small-cap stocks were the winners of the day, the Russell 2000 index reaching a new intraday high.

GE Vernova (GEV) received a huge boost after upwardly revising its revenue guidance and increasing its shareholder payout. Palantir (PLTR) and Taiwan Semiconductor (TSM) were also among the investors' favorites. Recently added S&P 500 member Comfort Systems (FIX) indicated possible gains, while Tesla (TSLA) and Vertiv Holdings (VRT) are merging.

Oracle's Q2 report showed earnings above analyst expectations, however, the company failed to impress with its revenue. The firm raised its capital expenditure for the entire year and pointed out its "chip neutrality," indicating a broader hardware procurement strategy. The stock was down more than 11% before the market opened, falling below the 200-day moving average. The skepticism of the investors about Oracle's investments in AI servers was further reflected in the stocks of Nvidia, CoreWeave (CRWV), and other data center-focused companies.

Adobe (ADBE) and Synopsys (SNPS) were both slightly ahead of the estimates; Adobe's stock ponded slightly, while Synopsys' stock rose gently. Planet Labs (PL) stock jumped after the announcement of grant of results and it is on the path of exceeding its 50-day moving average. Fiber-optic components manufacturer Ciena (CIEN) reports Q2 results on Thursday, with shares already very close to the peak price.

Market and Future Indicators

The Dow Jones index futures fell by 0.4%

Фutures for the S&P 500 decreased by 0.9%

The Nasdaq futures dropped by 1.25%

The yield on a 10-year Treasury was at 4.12%

Bitcoin at one point went past $94,200 on Wednesday but then went below $90,000 by the night.

Traders hold on to the overnight futures movements as an indication for session direction in case of a considerable shift.

The Fed cut its interest rate to a range of 3.5%-3.75% and the dot-plot showed to be a sign of one more quarter-point cut next year. Powell characterizes the job market as being “gradually cooling” and spoke of a possible rate freeze at the beginning of 2026. Concerns about inflation were described as temporary and one-off tariff effects were blamed.

As a result of the Fed action, the Dow Jones Industrial Average was up 1.05%, the S&P 500 by 0.7% and the Nasdaq by 0.3%. Small caps were the biggest winners with the Russell 2000 gaining 1.3% to a new high. The sector ETFs showed that there were widespread gains:

Innovator IBD 50 ETF (FFTY) +1.4%

VanEck Vectors Semiconductor ETF (SMH) +1.4%

ARK Innovation ETF (ARKK) +0.8%, ARK Genomics ETF (ARKG) +1%

SPDR S&P Homebuilders ETF (XHB) +3.1%, U.S. Global Jets ETF (JETS) +2%

Energy Select SPDR ETF (XLE) +1.05%, Health Care Select Sector SPDR Fund (XLV) +1.45%

The price of crude oil increased by 0.4% to $58.46 per barrel. The yield of 10-year Treasury dipped to 4.16% where as that of two-year also fell to 3.56%.

GE Vernova rose 15.6% to 723, after surpassing its consolidation buy point with the support of raised revenue targets, increased buybacks, and a doubled dividend. Palantir increased by 3.3% to 187.91 on getting a Navy contract. Taiwan Semiconductor 2.2% to 310.14 on the back of strong sales in November. Comfort Systems went up 3.8% after closing above its 50-day line. Tesla and Vertiv both gained slightly, they are trading within forming consolidation patterns.