Dip Buyers Step In as Oracle’s AI Spending Plans Rattle Tech Markets – Europe Market Wrap
US equity futures pared a sharp early decline as bargain hunters moved in, easing the pullback triggered by concerns over Oracle’s plans for massive new spending on artificial-intelligence infrastructure.
S&P 500 futures were down about 0.5%, recovering from a slide of more than 1%. Nasdaq 100 contracts also retraced part of a 1.6% drop. Oracle — often treated as a proxy for the scale of AI investment — tumbled more than 10% before the opening bell after cloud revenue fell short of expectations and the company boosted its 2026 capital-spending target by $15 billion, taking it to $50 billion.
Skepticism toward the big AI names lingered. Nvidia led declines among the so-called Magnificent Seven after slipping nearly 2%. Bitcoin drifted toward $90,000, while the dollar was little changed.
Oracle’s update reignited anxiety around stretched valuations in the tech sector and whether the enormous sums being poured into AI infrastructure will ultimately deliver the returns investors expect — the same worry that fueled weeks of turbulence in November. Despite powering much of this year’s surge in the S&P 500, some investors have begun rotating away from the biggest tech names as the broader US economy continues to look resilient.
Attention will soon turn to Broadcom’s results after the close. The stock has soared more than 180% from its April low, and analysts expect earnings roughly in line with — or slightly above — forecasts as spending from hyperscale clients continues to expand.
Oracle’s numbers arrived just after the S&P 500 finished Wednesday within reach of an all-time high, buoyed by the Federal Reserve’s rate cut and Chair Jerome Powell’s relatively upbeat assessment of the economy.
Markets took comfort in policymakers leaving room for additional easing next year, even though the quarter-point cut drew three dissents. Traders are still pricing in two rate reductions in 2026, despite Fed projections that point to just one.
Treasuries extended Wednesday’s rally, supported by the combination of the rate cut and the Fed’s plan to resume bill purchases to rebuild bank reserves. The 10-year yield — which dropped about four basis points after the decision — slipped another point to 4.14% on Thursday. The move halted a climb in yields that had pushed one global benchmark to its highest level since 2009.
Powell said the central bank has done enough to help stabilize the labor market while keeping policy restrictive enough to continue cooling inflation. Officials raised their median growth forecast for 2026 to 2.3%, up from 1.8% in September, and now expect inflation to ease to 2.4% next year, compared with the prior 2.6% estimate.
