BY EMMANUEL OGBONNA
Most U.S. stocks advanced on Thursday, but a steep downturn for Oracle dragged on the broader market and stirred fresh debate over whether the massive corporate spending on artificial-intelligence technology will ultimately deliver the returns investors expect.
The mixed mood left the S&P 500 essentially flat, hovering just below the record it reached in October, while pressure on heavyweight tech stocks pushed the Nasdaq composite down 0.6%. The Dow Jones Industrial Average, by contrast, climbed sharply, rising 625 points, or 1.3%, by early afternoon and putting the index on pace for a new milestone.
Oracle’s plunge dominated trading. Shares of the software giant sank 13.4%, at one point heading toward its worst single-day decline since 2001, during the unraveling of the dot-com bubble. The company reported quarterly revenue growth of 14%—solid by most standards but still shy of Wall Street’s expectations. Its profit exceeded forecasts, yet investors focused instead on the company’s accelerating push into AI infrastructure, a strategy that could require vast spending over the coming year.
Analysts said they were taken aback by the scale of Oracle’s planned investments in AI hardware and cloud capacity, raising questions about whether the company can fund its ambitions without straining its balance sheet. The concerns reignited broader uncertainty about the entire AI sector, where companies have poured billions into chips, servers, and data centers amid surging global demand for machine-learning tools. Skepticism about inflated valuations and unclear long-term payoffs contributed to volatile swings across the market last month.
Nvidia, the most prominent beneficiary of the AI boom, dropped 2.8% and became the single largest drag on the S&P 500. The chipmaker is currently generating close to $20 billion in monthly revenue as companies race to build AI-ready computing infrastructure. Oracle Chairman Larry Ellison sought to reassure investors, stating that the company will continue purchasing Nvidia chips but is now adopting a “chip neutrality” approach, using whatever technology its customers prefer in anticipation of rapid shifts in the industry.
Despite weakness in AI-linked stocks, the majority of the market moved higher. Roughly three-quarters of the companies in the S&P 500 traded in positive territory.
Eli Lilly was among the day’s biggest contributors to the gains, jumping 2.6% after releasing encouraging clinical trial data for a treatment targeting overweight or obese adults with knee osteoarthritis. The therapy, which excludes diabetic patients, added momentum to the company’s already high-performing drug pipeline.
Disney also advanced, rising 1.4% after OpenAI confirmed that the entertainment company is investing $1 billion in the firm. The multi-year partnership will allow OpenAI to generate short videos using more than 200 characters across Disney’s brands, including Marvel, Pixar, and Star Wars.
Satellite-imaging firm Planet Labs PBC surged 36.7% after reporting quarterly results that exceeded analyst expectations, boosting optimism about demand for Earth-observation data among governments and commercial clients.
But several retail and apparel companies posted deep losses. Oxford Industries, the parent of Tommy Bahama and Lilly Pulitzer, fell 20.8% after warning that consumer spending has softened and that the start of the holiday shopping season was weaker than anticipated. Chief executive Tom Chubb said customers have become increasingly price-sensitive, prompting the company to lower its full-year revenue forecast. Vera Bradley also slumped, dropping 22.3% following a quarterly loss that exceeded projections.
In the bond market, Treasury yields dipped modestly after new data showed an unexpected rise in unemployment claims last week, possibly hinting at mounting layoffs. The report added to speculation that the Federal Reserve may continue easing interest rates to support the labor market. On Wednesday, yields had already fallen after the Fed cut its benchmark rate for the third time this year and signaled that further reductions could come in 2026. Lower rates generally boost asset prices by making borrowing cheaper for companies and consumers.
The yield on the 10-year Treasury slipped to 4.12% from 4.13% a day earlier and from 4.18% on Tuesday.
Overseas markets delivered a mixed picture. European indexes inched higher, while markets in much of Asia retreated. Japan’s Nikkei 225 declined 0.9%, weighed down by a sharp fall in shares of SoftBank Group, a major investor in AI-related firms.
As investors continue to sift through earnings reports, economic data, and shifting expectations around AI, Wall Street remains locked between optimism about technological innovation and caution over how much risk companies are taking on to chase it.
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