Stock Market Today: Dow Rises as Oracle Crashes 16%, Nasdaq Slips to 23,455 Amid AI Selloff
Wall Street Splits As Fed Cut Collides With Oracle Shock
U.S. equities opened sharply divided on Thursday, with the S&P 500 and Nasdaq Composite (^IXIC) giving back a chunk of Wednesday’s post-Fed gains while the Dow Jones Industrial Average (^DJI) eked out further upside. The Nasdaq traded around 23,450–23,500, down roughly 0.8%, and the S&P 500 slipped about 0.4%, while the Dow added roughly 0.3%–0.6%, or close to +285 points, helped by its lighter exposure to mega-cap AI hardware.
That reversal came less than 24 hours after the Federal Reserve cut the funds rate another 25 bps to a 3.50%–3.75% target band, the third reduction this year, and brought policy into the “neutral” zone by its own definition. Futures initially pushed the S&P 500 to within a few points of a record close and left the Dow less than 200 points from its own all-time high, but the optimism evaporated once investors saw the details of Oracle’s (ORCL) quarter and AI spending plans.
Fed Cut To 3.50%–3.75% Meets A Market That No Longer Buys The Pivot
The Fed delivered exactly what was priced: a 25 bp cut and a message that policy is now “well positioned to wait and see.” Chair Jerome Powell stressed that further moves will depend on incoming data and highlighted that tariffs imposed under President Trump added a one-off inflation impulse, but he pushed back against hopes for an aggressive easing cycle. Projections now show just one additional quarter-point cut in 2026, leaving the market to decide whether the Fed has basically finished or is simply pausing.
The rates market took that as mildly dovish but not explosive. The 10-year Treasury yield (^TNX) eased to about 4.10%–4.14%, down a few basis points from the 4.21% intraday high on Wednesday. Two-year yields also slipped after their biggest drop in months. Fed funds futures now price only two cuts in 2026, with roughly a 50% chance the first comes by March. That is enough to support cyclicals and high-beta assets, but not enough to justify unlimited multiple expansion for AI stories already priced for perfection.
Labor Data: Jobless Claims Jump But Under The Surface Stays Firm
The macro test arrived via weekly unemployment data. Initial jobless claims jumped to 236,000 in the week ended Dec. 6, up 44,000 from the prior week’s revised 192,000 and the biggest weekly increase since 2020. The four-week moving average reached 216,750, hinting that the labor market is cooling from ultra-tight conditions.
Continuing claims fell sharply by 99,000 to 1.84 million, undercutting the idea of a sudden collapse in hiring. Part of the spike is seasonal and distorted by a government shutdown that disrupted October–November data. Net takeaway: the labor market is normalizing, not breaking. That supports the Fed’s decision to move rates back toward neutral while keeping its options open, but it doesn’t give equity investors a green light to assume a 1998-style easing cycle.
Oracle’s 16% Collapse Reprices The AI Capex Story
The real story today is Oracle (ORCL). The stock collapsed 13%–16%, trading around $190–$193 after printing an after-hours drop of more than 11% the previous night. Fiscal Q2 revenue came in at $16.06B, missing the $16.21B consensus despite a solid 14% year-on-year increase. Adjusted EPS looked impressive at $2.26 versus $1.64 expected, but the market ignored the beat and focused on the quality and cost of growth.
AI infrastructure revenue is still strong. Oracle Cloud Infrastructure (OCI) revenue surged 68% to $4.1B, roughly in line with what the Street wanted, and remaining performance obligations (RPO) exploded 438% year-on-year to $523B, beating the roughly $502B analyst mark. Those RPO commitments were driven by big-ticket deals with Meta Platforms (META), Nvidia (NVDA) and other cloud customers.
The problem is the bill. Oracle boosted its already elevated data-center capex, adding another roughly $15B to its spending plans. Investors now see a balance sheet that is increasingly leveraged into a long-duration AI story with uncertain cash-flow timing. Revenue growth was good, not spectacular; the margin headroom is shrinking; and the debt load becomes more uncomfortable if the Fed really is close to neutral rather than barreling into deep cuts. The market punished that mix by almost wiping out months of gains in a single session.
From a positioning standpoint, ORCL shifts from a clean AI winner to a higher-beta funding source. With the stock down more than 15% on a modest top-line miss and a capex overshoot, the verdict here leans Hold to underweight, not a fresh buy, until investors see evidence that the $523B backlog converts into high-margin cash faster than the cost of capital rises.
AI Hardware Trade: Nvidia, AMD, Micron And Broadcom Lose Altitude
Oracle’s print hit every corner of the AI supply chain. Nvidia (NVDA), which has been the emblem of the AI boom, slipped about 1.5%–1.6% as investors reassessed just how much incremental GPU demand will actually show up in 2026–2027 if hyperscalers are already balking at the cash burn.
Advanced Micro Devices (AMD) sold off more sharply. The stock traded around $214.63, down $6.79 or roughly 3.1% on the day, a clear reminder that any AI-linked name priced for aggressive growth is hostage to every negative datapoint in the infrastructure chain. The narrative that AMD can steadily steal GPU share from NVDA remains intact, but the tape is telling you that the Street is unwilling to pay unlimited multiples for that story when one of its biggest cloud customers is trying to rein in spending.
Memory and connectivity names also felt the pressure. Micron Technology (MU), which has tripled this year and recently closed just under $264 after a 200%+ year-to-date climb, gave back a couple of percent as analysts reiterated that the stock is already discounting a multi-year high-bandwidth DRAM cycle. Citi’s move to lift its MU target to $300 underscores the structural bull case, but with the stock near all-time highs, any hint that AI server growth might normalize sooner than expected is enough to trigger profit-taking.
Broadcom (AVGO), another AI infrastructure bellwether, dropped roughly 3% ahead of its earnings release, signaling how nervous the market has become about AI-tied capex. A strong guide will be required to keep AVGO above water given its valuation premium. Marvell Technology (MRVL) lost about 2% after a report suggested it could lose networking orders to Microsoft (MSFT) and Amazon Web Services (AMZN), reminding investors that hyperscalers will keep squeezing suppliers even when AI demand is booming.
On semis, the setup is now clear: the structural AI story is intact, but the tape is telling you to move from indiscriminate “AI at any price” to selective exposure. NVDA, AMD, MU and AVGO move to a Hold with trading bias, not across-the-board “back up the truck” buys at these levels.
Cisco, Synopsys And Planet Labs Show There Is Life Beyond Pure AI Hype
While AI extremes cracked, some tech names gave a very different signal. Cisco Systems (CSCO) finally clawed back to its pre-dot-com-bubble territory this week, trading around $80.12–$80.25, essentially matching the March 27, 2000 peak. That slow, 25-year round-trip tells you two things: bubbles can take decades to repair, and investors are finally willing to pay full price again for a mature networking franchise leveraged to AI-driven data-center upgrades. CSCO screens as a Hold to modest Buy: valuations aren’t cheap, but balance-sheet risk is nowhere near Oracle’s territory.
Synopsys (SNPS) delivered a clean quarter in EDA software: adjusted EPS $2.90 vs $2.78 expected on revenue $2.26B vs $2.25B, lifting the stock more than 2% after hours. The company has already attracted a $2B strategic investment from Nvidia, knitting it directly into the AI chip design pipeline. Unlike capex-heavy cloud builders, SNPS converts AI upside directly into high-margin software revenue.
Planet Labs (PL) rallied more than 14% after revenue hit $81M, well ahead of the $72M consensus. That kind of upside from a small-cap satellite imagery provider underlines how much appetite still exists for differentiated growth at a reasonable price once investors step away from the megacap AI complex.
Disney, Lilly, Novo And Magnum: Healthcare And Consumer Stories Diverge
Outside tech, the tape told several different sector stories. The Walt Disney Company (DIS) traded near $111.04, up about 2.0%, as the market digested a dual catalyst: a $1B equity investment in OpenAI and a three-year licensing deal that allows more than 200 Disney characters—from Marvel and Star Wars to Pixar—to be used inside the Sora AI video generator. Disney becomes OpenAI’s first major content-licensing partner, and will also be a significant Sora customer, integrating the technology into Disney+ and internal tools. Net result: DIS is quietly rebuilding its digital moat and extracting direct monetization from AI instead of just fearing piracy. That supports a Buy-leaning Hold view while investors wait for clearer evidence of streaming profitability.
In pharma, Eli Lilly (LLY) remains the poster child of the obesity-drug trade. Shares hover just under $1,000 (around $994.37), after the company reported late-stage results for next-gen obesity candidate retatrutide. The highest dose delivered 23.7% weight loss including dropouts and 28.7% for patients who remained on therapy over 68 weeks, while also improving knee-arthritis pain. With seven more Phase 3 readouts expected in 2026, Lilly has effectively extended its GLP-1/obesity franchise beyond Zepbound and its upcoming pills. At this valuation, LLY stays a core overweight for investors willing to stomach volatility.
The contrast is Novo Nordisk (NVO). The stock trades around $49.93, up about 1.7% on the day, but down more than 50% year-to-date after a string of profit warnings, competitive pressure and trial disappointments. The semaglutide patent window toward 2032 is now fully in focus, and the market is questioning how Novo replaces Wegovy/Ozempic growth. At this point NVO is no longer priced as a flawless GLP-1 leader but as a turnaround. Risk-tolerant investors can argue for a speculative Hold, but structurally the leadership premium has migrated to LLY.
In consumer, The Magnum Ice Cream Company (MICC)—a spin-off from Unilever (UL)—continued its strong debut, trading near $15.92, up more than 6% intraday. The new pure-play ice cream name is benefitting from rotation into branded staples with pricing power, a theme that remains attractive if growth decelerates but nominal consumption stays strong.
Bitcoin, Crypto And Gemini Space: AI Jitters Hit Risk Assets
Risk sentiment wasn’t just visible in equities. Bitcoin (BTC-USD) dropped back below the psychologically important $90,000 level, trading in the $90,000–$90,500 zone after failing to hold an overnight spike toward $94,000. Ethereum slid roughly 4% to about $3,190–$3,200. The move underscores that, for now, crypto is trading like a high-beta macro asset: extremely sensitive to both the Fed’s tone and equity-market risk appetite. With AI valuations under pressure, short-term money rotated out of BTC and other speculative trades.
One bright spot in the crypto ecosystem is Gemini Space Station (GEMI). Shares jumped around 9% to roughly $12.39 after the CFTC approved its application for a derivatives exchange, enabling the firm to run event-contract and prediction-market products. The Winklevoss-backed company now sits at the intersection of digital assets, prediction markets and regulated derivatives—exactly where traditional capital is most comfortable deploying risk. For GEMI, the move is clearly bullish; for the rest of crypto, it’s a reminder that regulatory clarity can create winners even when headline token prices are under pressure.
Gold, Oil And Base Metals React To Fed, Dollar And Geopolitics
The cross-asset backdrop is classic late-cycle: softer yields, a weaker dollar and bifurcated risk appetite. The U.S. Dollar Index (DXY) dropped roughly 0.6% to around 98.24, its lowest reading since October. That dollar move, coupled with the Fed’s cut, put a bid under hard assets.
COMEX gold futures climbed about 0.8% to roughly $4,255 an ounce. Investors are repositioning gold as both a hedge against policy mistakes and an alternative to richly valued AI equities; with the Fed signaling a pause at neutral and real yields not spiking, that logic remains intact.
WTI crude (CL=F), by contrast, slipped about 2% to roughly $57.30 a barrel. Crude is digesting competing signals: Fed easing and a softer dollar are supportive, but renewed supply concerns—such as the U.S. seizure of a sanctioned tanker off Venezuela—are colliding with worries about global demand if growth slows into 2026. For now, WTI trades like a range-bound asset: spikes toward the low $60s meet selling, dips into the mid-$50s attract buyers.
Industrial metals were firmer, especially in India’s futures markets. On the MCX, aluminum for January delivery moved up to about ₹280.95/kg, zinc to around ₹307.80/kg and copper to roughly ₹1,103.20/kg as traders added long positions on improving demand and the weaker dollar. Those levels confirm that the real-economy backdrop—construction, autos, power—is still absorbing metal, supporting the case for cyclical equities even as high-multiple AI names wobble.
India Outperforms: Sensex, Nifty And Rupee Tell A Different Story
While U.S. tech bled, India quietly outperformed. The Nifty 50 closed at 25,898.55, up 0.55%, and the BSE Sensex finished at 84,818.13, up 0.51%, snapping a three-day losing streak. Mid-caps and small-caps gained roughly 1.0% and 0.8%, respectively, as breadth improved.
Leadership came from Eternal, Tata Steel, Kotak Mahindra Bank, Ultratech Cement and Maruti Suzuki, all up roughly 1%–3%. Sectorally, nearly everything traded green—autos, banks, metals, IT and real estate—while only pockets of consumer and media names showed mild weakness.
Under the surface, though, there are pressure points. The Indian rupee closed at a record low around ₹90.37 per USD, down about 0.4% on the day, with intraday trades past ₹90.42. Bond markets rallied, with the 10-year benchmark yield slipping to about 6.61% from 6.66% the previous session, on the back of the Fed cut and expectations of continued RBI bond purchases.
Strategists see this as a classic “good growth, expensive currency hedge” setup: equities can still grind higher—one major house is targeting Nifty 29,000+ by late 2026—but foreign investors will be more sensitive to rupee weakness and policy noise. For now, India remains a Buy-on-dip story in large caps, while small-caps require more discrimination after a huge run and recent volatility.
Europe, Japan And Australia: Oracle’s Shadow Spreads
In Europe, the STOXX 600 traded roughly 0.3% lower around 576–577, with tech leading the declines. SAP slid about 2.5% as investors extrapolated Oracle’s miss into the broader enterprise-software complex and questioned how much AI infrastructure spending is truly incremental versus cannibalizing other IT budgets.
Japan’s Nikkei 225 dropped around 0.9% to about 50,148.82, reversing early gains as SoftBank Group tracked Oracle’s U.S. decline and dragged broader tech lower. The Topix index slipped 0.94% to around 3,357, with fully 84% of Prime Market stocks closing down.
In Australia, the S&P/ASX 200 managed a 0.2% gain to about 8,592, helped by miners and stronger commodity prices in local currency terms. New Zealand’s S&P/NZX 50 added roughly 0.2% as well. The message across the region: the Fed’s cut and weaker dollar are supportive, but any hint that AI capex is peaking or misallocated will hit tech-heavy indices disproportionately.
Flows, Funds And Local Stories: Smallcaps, SIPs And Regulatory Shifts
Flows data show that investors have not abandoned equities. In India, November net equity mutual-fund inflows were around ₹29,911 crore, up from roughly ₹24,672 crore in October, with large-cap funds taking in about ₹1,640 crore versus ₹972 crore previously. SIP contributions remained massive at roughly ₹29,445 crore—only marginally below last month’s record—signaling persistent domestic retail buying even as global investors debate AI valuations.
Small-cap funds saw a 27% jump in monthly inflows despite a 3% correction in the Nifty Smallcap 250, underlining how aggressive local risk appetite remains. That creates a two-way risk: upside as domestic flows chase quality growth, and downside if global jitters or regulatory interventions force a sudden reassessment of valuations.
On the regulatory front, SEBI deferred the third phase of its nomination framework for securities accounts, easing near-term operational pressure on brokers and depositories. Meanwhile, corporate newsflow—from GAIL’s roughly ₹143 crore statutory penalty to new orders for Tata Power, Astra Microwave and Oswal Pumps—shows that domestic capex and infrastructure themes remain alive beneath index-level noise.
Market Verdict: Rotate Out Of Over-Owned AI, Lean Into Quality Cyclicals
Taking all the data together, today’s message is not that AI is dead; it’s that the market is no longer willing to rubber-stamp every AI-linked capex plan at any price. Oracle’s 16% drawdown on a $16.06B revenue print, $523B RPO and another $15B capex escalation is a sharp reminder that balance sheets and execution still matter.
For allocation:
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Mega-cap AI hardware (NVDA, AMD, AVGO, MU): shift from aggressive Buy to Hold / trading Buy on deep dips, given stretched multiples and rising evidence that customers will pace spending.
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AI infrastructure with heavy capex and leverage (ORCL): Sell-to-underweight / Hold only for high-conviction long-term investors until there is proof that backlog converts into free cash flow faster than debt costs climb.
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Profitable AI-adjacent software (SNPS, select cloud names): maintain Overweight, as they capture AI upside with far less balance-sheet risk.
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Healthcare leaders (LLY): remain core Buy, with obesity data justifying premium valuation; NVO is a speculative Hold until the pipeline and strategy are clearer.
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Global cyclicals and India large caps (Sensex, Nifty): Buy-on-dip, supported by domestic flows, softer dollar and stable macro, but size positions conservatively given rupee depreciation and global volatility.
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Crypto (BTC-USD): treat as high-beta macro trade, not a safe haven; underweight if you already have significant risk exposure to growth and AI.
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Gold: maintain strategic Buy as a hedge against policy missteps and lingering inflation risk at a time when real yields soften and equity risk premiums compress.
Bottom line: the stock market today is no longer a one-way bet on AI infrastructure. With the Fed funds rate sitting at 3.50%–3.75%, the dollar sliding and jobless claims flashing a cooler but not broken labor market, the smarter move is rotation—out of the most crowded, capex-heavy AI stories and toward quality cyclicals, select software, healthcare leaders and markets like India where earnings and flows, not hype, are doing the heavy lifting.
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