Stock futures show a downturn this morning, primarily influenced by declines in the technology sector, following a surge in major indexes on Wednesday after the Federal Reserve cut interest rates. This marks the third consecutive reduction in the Fed’s benchmark rate, but the prospects for further cuts remain uncertain.
Oracle’s stock has seen significant losses after it released its quarterly results, reigniting concerns about the sustainability of the artificial intelligence (AI) sector. Futures for the S&P 500 and the tech-heavy Nasdaq are down 0.3% and 0.5%, respectively, while futures for the Dow Jones Industrial Average show little change. The yield on the 10-year Treasury note fell to 4.12%, down from 4.16% yesterday, while Bitcoin has decreased to approximately $90,300, down from earlier highs. Gold futures have risen by 0.5% to $4,245 an ounce, while WTI crude oil futures have dropped by 1.2%, settling at $57.80 an ounce.
Regarding the Federal Reserve’s recent policy actions, Fed Chair Jerome Powell emphasized after the latest rate cut that the current fed funds rate sits at the high end of what is considered a “neutral” range. This implies that the rate is balanced enough to neither overly stimulate the economy nor suppress it with high borrowing costs. Powell indicated that the Fed is strategically positioned to assess future adjustments in response to incoming economic data and evolving conditions. Projections suggest only one additional rate cut may occur in 2026, with market expectations leaning toward the Fed maintaining rates steady at least until March.
In company news, Oracle’s stock fell dramatically following its recent earnings report, which revealed sales that missed analyst expectations. Despite securing new agreements with AI leaders Meta Platforms and Nvidia—boosting its backlog of orders to $523 billion—investor doubt about a potential AI bubble persists. The stock reportedly plummeted by 13% in premarket trading, having already relinquished gains seen after the previous quarter’s report that had sent shares to a record high.
Meanwhile, chipmaker Broadcom is set to report its earnings later today, providing critical insights into the health of the AI market. Analysts expect the company to announce record revenues, propelled by surging demand. Nonetheless, there are concerns about competitive pressures, especially from Alphabet’s Google, which is looking to develop its own AI chips, diminishing its reliance on Broadcom. In the meantime, Broadcom’s stock experienced a slight decline, dropping about 1% in premarket activity after hitting a record high on Wednesday.
Coca-Cola is also undergoing a leadership transition. The company announced that COO Henrique Braun will take over as CEO in March, succeeding current CEO James Quincey, who will transition to the role of executive chairman. Braun, a long-time Coca-Cola employee, has been with the firm since 1996 and has held various leadership positions across different international divisions. Coca-Cola shares have performed well, gaining 13% since the beginning of the year, and remained largely unchanged during premarket trading.
