US stock markets experienced notable divergence on Thursday, with the Dow Jones Industrial Average reaching an all-time intraday high while the tech-heavy Nasdaq Composite and S&P 500 struggled amidst renewed concerns over artificial intelligence spending.
The Dow gained 1%, marking a significant milestone as it traded above its previous record closing level of 48,254.82. This rise came despite a broader pullback in technology stocks, prompted largely by disappointing earnings from Oracle. The software giant’s report reignited fears regarding overinvestment in AI as the company not only missed expectations on cloud sales but also announced an eye-popping increase of $15 billion in data center spending.
Oracle’s stock tumbled by as much as 16%, leading to heightened anxiety about tech valuations and potential risks associated with heavy AI investments.
In contrast, the Nasdaq Composite and S&P 500 fell by 1% and 0.3%, respectively, following Wednesday’s market rally triggered by the Federal Reserve’s decision to cut interest rates for the third time this year. The Fed’s policymakers indicated a slower path ahead in monetary easing, with Chairman Jerome Powell emphasizing optimism regarding the U.S. economic outlook. He noted the inflation pressures resulting from tariffs imposed during the previous administration as a “one-time” increase.
The focus shifted on Thursday to a significant rise in jobless claims, which surged to 236,000, marking the largest increase since 2020 after dipping to a three-year low previously. This jump raises questions about the labor market, with the next indication set for the delayed November jobs report due next Tuesday.
Amidst these developments, the U.S. trade deficit unexpectedly narrowed to its smallest in over five years, driven by a surge in exports. The deficit shrank by 10.9% to $52.8 billion, with consumer goods exports hitting record highs.
As earnings reports continued to roll out, companies like Broadcom, Costco, and Lululemon were set to announce their results, reflecting the ongoing interest in tech and consumer sectors.
In the commodity markets, oil prices extended losses amid geopolitical tensions. Brent crude fell below $62, while West Texas Intermediate traded under $58, influenced by the reaction to a crude tanker seizure by the U.S. Coast Guard and OPEC’s predictions of a balanced oil market through 2026.
The mixed opening on Thursday was underscored by Oracle’s earnings disappointment and rising jobless claims. While the Dow countered the tech-led decline with gains, the performance of the Nasdaq and S&P 500 remained tepid, highlighting the complexities within the current market environment.
In a separate development, Disney announced a $1 billion investment in OpenAI, enabling users of its video generation platform, Sora, to utilize Disney’s copyrighted characters. Shares of Disney rose slightly following the news, marking a significant step in content licensing and AI technology integration.
As the market navigated through these varied economic signals, investor sentiment remained cautious, reflecting a broader trend of volatility and uncertainty amidst evolving financial landscapes.
