US stock futures fell on Thursday after Oracle (ORCL) earnings revived AI overspending worries, risking the Wall Street rally that followed the Federal Reserve’s latest interest-rate cut.
Contracts on the S&P 500 (ES=F) and the Nasdaq 100 (NQ=F) were down 0.4% and 0.6%, respectively, paring deeper declines from earlier in the morning. Dow Jones Industrial Average futures (YM=F), which include fewer tech names, were little changed.
Oracle’s after-hours earnings brought AI spending fears back with a vengeance, killing off the bullish mood that took the S&P 500 (^GSPC) to the cusp of a new record high. The software giant missed on cloud sales and hiked its already aggressive data center spending by $15 billion. Its shares lost more than 10% amid fresh concerns about tech valuations, debt burdens, and the risk that hefty AI investments won’t pay off.
But the broader market has recovered somewhat, after finishing higher Wednesday after a split Fed voted to lower rates for the third time this year. Policymakers signaled a more gradual path of easing in the months ahead, but Chair Jerome Powell hinted that a rate hike would be off the table for January, while talking up the US economy’s strength.
Powell said the Fed is “well positioned to wait and see” how economic conditions evolve, adding that tariffs imposed under President Trump have contributed to inflation pressures that the central bank sees as a “one-time” increase.
That put the spotlight on a weekly update on jobless claims on Thursday, which came in significantly higher than expected at 236,000 after dipping to a three-year low in the Thanksgiving week. The next signal on the labor market will come from the delayed November jobs report, set for release next Tuesday.
Meanwhile, earnings reports continue with Broadcom (AVGO), Costco (COST) and Lululemon (LULU) all set to release results.
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