Global markets slipped on Thursday as a sharp selloff in Oracle overshadowed optimism from the Federal Reserve’s latest rate cut and reignited worries over AI profitability.
Shares of Oracle (ORCL) plunged more than 11% after hours following weaker-than-expected earnings and a cautious revenue outlook. Executives warned of rising AI-related spending, fueling concerns that massive infrastructure investments are not converting into profits as quickly as investors hoped.
The disappointment hit futures immediately, dragging S&P 500 futures down 0.9% and Nasdaq 100 futures lower by 1.3% in Asian trading.
AI-linked stocks across Asia followed the slide. Japan’s Nikkei (NI225) fell 1%, pressured by a 7.5% drop in SoftBank Group, a partner with Oracle on the U.S. Stargate data-center project. Hong Kong’s Hang Seng (HSI) added just 0.06%, leaving the broader MSCI Asia-Pacific ex-Japan index down 0.5%.
ANZ’s Head of Asia Research Khoon Goh said the negative reaction shows markets are “laser-focused on the capex surge,” with Oracle’s miss reviving last month’s doubts about the returns on aggressive AI investment.
The risk-off tone overshadowed the Fed’s 25 bps rate cut to 3.50%–3.75%, which initially lifted Wall Street, pushing the S&P 500 up 0.7%. Chair Jerome Powell struck a balanced outlook, keeping expectations for multiple cuts next year intact and pushing the euro above $1.17 as the dollar weakened.
Bond markets strengthened further after the Fed signaled it would begin buying short-term Treasuries to ease liquidity pressures.
• 10-year yields: 4.13% (–3 bps)
• 2-year yields: 3.52%
In currencies, the yen firmed to 155.62 ahead of next week’s Bank of Japan meeting, where a rate hike is expected. AUD and NZD softened, while the euro hit a two-month high.
Oil prices eased after earlier gains driven by geopolitical tensions, with Brent around $62.15 and WTI near $58.44.
