S&P 500, Dow close at record highs as Oracle sparks rush out of AI trade into broader market
The Dow Jones Industrial Average and S&P 500 reached new heights on Thursday as a Federal Reserve interest rate cut followed by disappointing Oracle results prompted investors to move out of high-flying tech stocks and into names that can benefit from a growing U.S. economy.
The 30-stock Dow rose 646.26 points, or 1.34%, to finish at 48,704.01, a new record high, supported by a rise in Visa shares after the name was upgraded at Bank of America. The broad market S&P 500 traded up 0.21% to settle at 6,901.00, which was also a record. However, the Nasdaq Composite pulled back 0.26% to finish at 23,593.86.
Oracle shares tumbled 11% after the cloud computing company posted disappointing quarterly revenue and raised its spending forecast, heightening concerns about the company’s debt.
The report added more fuel to the debate about how quickly tech companies will be able to see returns on their artificial intelligence investments, spurring a rotation trade. Other AI plays were trading lower, including Nvidia and Broadcom, which were each down 1%. Meanwhile, cyclical stocks like Home Depot were higher.
Source: Cnbc.com
