US Stock Market Today: S&P 500 Slips 0.4% After Oracle Lifts AI Spending Outlook and Tech Stocks Drop

US stocks retreated on Thursday as investors reassessed the strength of the technology sector. Oracle’s earnings report raised new concerns about the pace of AI spending and its ability to generate near-term returns. The S&P 500 slipped 0.4% after touching levels near a record close, while the NASDAQ 100 fell by 1% as major AI names dropped. Bitcoin also traded below $90,000 as risk appetite weakened across global markets.

Tech Stocks Decline as Oracle’s AI Costs Take Center Stage

Oracle shares fell after the company revealed higher capital expenditures tied to AI data centers and cloud infrastructure. The tech firm increased its 2026 spending plan to $50 billion, which added $15 billion to its previous estimate. Investors reacted to slower cloud sales, which raised fresh concerns about how quickly these investments may convert into revenue.

The losses spread across major technology firms. NVIDIA declined as traders reassessed the outlook for AI-linked demand. Other members of the Magnificent Seven also traded lower, pulling the NASDAQ 100 into negative territory. Market analysts noted that the reaction showed sensitivity to large-scale AI spending and the risks associated with extended valuations in the sector.

Concerns followed weeks of volatility linked to expectations of future demand for AI infrastructure. Oracle’s credit-risk metrics have increased since October, signaling rising caution around its funding plans. The results also arrived just hours before Broadcom’s quarterly earnings, which could test the broader AI trade further.

Fed Rate Cut Supports Sentiment, But Market Focus Shifts

The Federal Reserve’s third consecutive rate cut initially supported equities on Wednesday. Chair Jerome Powell presented an outlook that signaled confidence in the economy while keeping policy tight enough to maintain pressure on inflation. Treasury yields moved lower as traders priced in steady conditions for 2026 and the potential for one more cut next year.

However, the market focus shifted once US futures turned negative overnight. The decline in tech stocks outweighed positive reactions to the policy decision. Investors tracked the US 10-year Treasury yield, which held near 4.11% after a four-basis-point move earlier in the session. Rising jobless claims also shaped expectations for the labor market.

Currency markets moved without major swings. The dollar index softened, while the euro and the pound gained modestly. The yen strengthened as investors reduced exposure to risk assets.

Corporate Developments

• Disney agreed to invest $1 billion in OpenAI for new content partnerships.

• Disney licensed characters from Marvel, Pixar, Star Wars, and Disney for use on OpenAI’s Sora video platform.

• Eli Lilly reported strong clinical results for its next-generation obesity drug, which helped patients lose almost a quarter of their body weight.

• Coca-Cola said James Quincey will step down as CEO and will be replaced by Henrique Braun in March.

• Oracle reported higher capital spending tied to AI data centers and cloud infrastructure.

• Oracle raised its fiscal 2026 capex forecast to $50 billion, a $15 billion increase from September.

• OpenAI and Microsoft faced a new lawsuit linked to a murder-suicide case in Connecticut.

• Gemini Space Station shares gained after the firm secured a Commodity Futures Trading Commission license.

• CoreWeave and Nebius fell in premarket trading as investors reacted to signs of slower AI infrastructure revenue conversion.

Broader investor sentiment remains cautious as markets weigh strong economic signals against renewed pressure in the AI sector. Traders continue to watch corporate earnings and policy developments to gauge the direction of the year-end rally.

Also Read: FTSE 100 Live: Index Opens Lower as Oracle Earnings Hit Sentiment; Drax Rises on Data Centre Plan