Traders at the New York Stock Exchange faced a challenging day as stock futures dipped sharply. Fear spread through tech stocks, sparked by Oracle’s disappointing earnings. S&P 500 futures were down 0.6%, while Nasdaq 100 futures fell 0.8%. The Dow Jones futures also decreased by 101 points, or 0.2%.
Oracle’s shares dropped 11% after it reported slow quarterly revenue and raised its spending outlook. This disappointment has reignited questions about how quickly tech companies can see returns from their investments in artificial intelligence. Notably, shares of Nvidia slipped 1%, and CoreWeave saw a decline of over 2%.
Just the day before, there was some optimism in the markets. The Federal Reserve announced an interest rate cut for the third time this year, lowering the key rate to a range of 3.5% to 3.75%. Fed Chair Jerome Powell stated the bank is ready to monitor economic trends before making further decisions. He attributed some inflation to tariffs imposed during Donald Trump’s administration.
Interestingly, small-cap stocks like those in the Russell 2000 index reached a record high on the same day. These companies often benefit from lower rates more quickly than larger companies, as their borrowing costs are more directly connected to market rates.
Despite the recent rally, some experts urge caution. Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted that while short-term optimism exists, the long-term outlook for interest rates remains uncertain. He suggested that investors might be overly optimistic about further rate cuts happening quickly.
Ellen Hazen, chief market strategist for F.L. Putnam Investment Management, agreed. She warned that uncertainty over interest rates, combined with mixed economic data, could lead to increased volatility as we head into 2026.
In summary, the market is at a crossroads. While the Fed’s actions have brought some relief, challenges remain. Analysts stress the importance of being cautious as we navigate these shifting economic landscapes. For ongoing updates on market trends, you can refer to sources like the Federal Reserve and Reuters.
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