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Oracle Earnings Spark Tech Sell-off, Dow Soars
13 Dec
Summary
- Nasdaq 100 fell to a one-week low due to AI spending concerns.
- Dow Jones Industrials reached a new all-time high, boosted by Visa.
- US weekly jobless claims jumped to a three-month high.
- US trade deficit shrank unexpectedly to its smallest in over five years.
The stock market experienced a bifurcated trading session, with the Nasdaq 100 index dipping to a one-week low while the Dow Jones Industrials carved out a new all-time high. Investor sentiment soured following Oracle's quarterly earnings, which fell short of expectations and highlighted significant capital expenditure for AI initiatives. This led to a notable decline in Oracle's stock price and cast a shadow over the broader technology sector.
Despite anxieties surrounding AI investments, underlying market support emerged from a weakening labor market and a shrinking trade deficit. Weekly initial unemployment claims in the US rose unexpectedly to a three-month peak, a sign that could influence future Federal Reserve policy. Concurrently, the US trade deficit for September contracted more than anticipated, reaching its most favorable position in over five years.
