U.S. stocks retreated Thursday after Oracle Corp. reported its biggest one-day drop in nearly a year, stoking concerns that heavy AI investments may outpace near-term returns. Traders focused on preserving trend structure, with flows concentrated in large-cap equities.
Oracle Dragging Tech
Oracle shares plunged over 11% after disclosing a surge in capital expenditures for AI infrastructure. Quarterly spending reached roughly $12 billion, exceeding expectations, while full-year capex guidance jumped to $50 billion — $15 billion higher than the September forecast.
The announcement raised doubts over when AI investments will generate meaningful cloud revenue, sending Oracle to its lowest level since early 2024 and pushing a measure of credit risk to a 16-year high. Broader tech sentiment, particularly AI-focused stocks that fueled much of this year’s rally, weakened, with the Nasdaq 100 slipping as investors rotated cautiously into other sectors.
Crypto Holds Steady
Meanwhile, crypto markets traded with relative stability, modestly decoupling from equity weakness. Bitcoin reclaimed levels above $92,000, up roughly 2.6%, stabilizing after briefly dipping into the low $90,000s.
Ether rose in tandem, approaching $3,260, while SOL outperformed with gains exceeding 6%, reflecting renewed interest in higher-beta layer-1 tokens. XRP and BNB posted modest gains, remaining range-bound amid anticipation for spot ETF updates, while Dogecoin edged higher but stayed lower on a weekly basis, tracking overall market sentiment rather than token-specific drivers.
Market Sentiment and Fed Outlook
“Major institutions remain divided on the Fed’s next moves,” analysts at Bitunix told CoinDesk. “Some expect further cuts starting in March, while others foresee a January pause, a cautious first half, or delays until after June.”
They added that the “hawkish cut” underscores the FOMC’s growing challenge in maintaining cohesion under Chair Powell.
Looking Ahead
With markets navigating both a fragmented Fed outlook and increased scrutiny of AI spending, investors appear positioned to remain tactical. Near-term trends are likely to depend more on earnings and liquidity than policy signals, with flows concentrated in large-cap equities and top-tier crypto as traders weigh selective upside against macro and corporate spending pressures.
