Stock Market Update
Major stock indexes, including the Dow and S&P 500, saw record closing highs on Thursday, despite concerns over the tech sector. The Nasdaq ended lower due to disappointing quarterly results from Oracle, a leading cloud computing company.
Oracle's Disappointing Results
Oracle missed analysts' sales and profit estimates, causing its shares to fall by 10.8%. The company also flagged a $15 billion artificial intelligence (AI) overspend, reigniting concerns over high tech valuations. Other AI leaders, such as Nvidia, also saw their shares decline by 1.5%.
Global Market Trends
A global stock index was higher, while the U.S. dollar and U.S. bond yields declined. The euro and Swiss franc saw gains against the dollar, with the euro reaching its highest level since October 3. The U.S. dollar index fell to 98.32, its lowest level in months.
Interest Rates and Market Outlook
The Federal Reserve (Fed) cut interest rates by 25 basis points, as expected, but gave a less hawkish outlook than anticipated. This led to a decline in U.S. Treasury yields, with the 10-year note yield falling to 4.137%. The 2-year note yield also decreased, indicating lower interest rate expectations for the Fed.
Commodity Prices
Oil prices ended lower, with U.S. crude falling to $57.60 a barrel and Brent declining to $61.28. Spot gold rose by 1.07% to $4,273.09 an ounce, as investors sought safe-haven assets.
The market is expected to remain cautious, with AI and interest rates remaining in focus. As Michael O'Rourke, chief market strategist at JonesTrading, noted, 'AI is going to remain in focus for the next 24 hours or so.'
- Dow Jones Industrial Average: 48,704.01, up 1.34%
- S&P 500: 6,901.00, up 0.21%
- Nasdaq Composite: 23,593.86, down 0.25%