Gold prices dip as markets digest Fed outlook; silver falls from record high
Updates with deeper losses in futures, analyst comments on Oracle
Investing.com-- Wall Street futures extended losses on Wednesday evening as underwhelming earnings from Oracle sparked renewed concerns over artificial intelligence spending, offsetting some dovish signals from the Federal Reserve.
A sharp fall in Oracle’s shares and those of related AI and tech companies were a major drag on futures, as markets grew increasingly concerned over how the cloud computing giant will fund its data center plans. This trend was furthered during the Asian session on Thursday.
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Concerns over AI largely offset dovish signals from the Fed, which cut interest rates and signaled plans to buy more bills in the market and boost liquidity levels.
S&P 500 Futures fell 0.9% to 6,832.50 points by 22:16 ET (03:16 GMT). Nasdaq 100 Futures slid 1.4% to 25,446.25 points, while Dow Jones Futures fell 0.4% to 47,916.0 points.
Oracle slumps, Nvidia down as mixed earnings spark AI doubts
Oracle (NYSE:ORCL) slid as much as 10% in aftermarket trade, while related AI-linked stocks, including NVIDIA (NASDAQ:NVDA), also retreated.
This came after Oracle forecast disappointing earnings for the current quarter, and sharply hiked its capital expenditure outlook for fiscal 2026. Oracle’s fiscal second-quarter earnings also underwhelmed.
The weak earnings, coupled with plans for higher spending, sparked increased doubts over just how Oracle planned to convert its massive AI expenditures into revenue.
This also spurred doubts over the company’s increasing debt pile, after it issued billions in bonds and notes this year to fund its AI buildout.
Several brokerages cut their price targets on Oracle after its earnings. BMO analysts called its earnings "lackluster from a revenue perspective," although they still remained positive on Oracle’s "positioning in cloud and AI as well as its full stack application offering."
But BMO analysts noted that Oracle’s massive exposure to OpenAI created "some risk longer term given the size of the commitments."
BMO cut Oracle’s target price to $270 from $275, and maintained the stock at Buy.
Concerns over Oracle sparked losses in broader tech and AI stocks, including chipmakers. Nvidia fell 1.3%, while CoreWeave Inc (NASDAQ:CRWV) fell over 3%. Others, including AMD (NASDAQ:AMD), TSMC (NYSE:TSM), Broadcom Inc (NASDAQ:AVGO), and Marvell Technology Inc (NASDAQ:MRVL), fell between 0.6% and 2% in aftermarket trade.
Wall St ends higher as Fed cuts rates, signals dovish
Wall Street indexes clocked a positive close on Wednesday, after the Fed cut interest rates by 25 basis points as expected.
While Fed Chair Jerome Powell did outline a higher bar for future rate cuts, he also announced that the central bank will immediately begin buying short-dated government bonds to boost market liquidity levels. The Fed will initially buy about $40 billion of Treasury bills per month.
While Wednesday’s rate cut was priced in, the bond buying announcement pointed to looser monetary policy in the coming months, helping support risk appetite. This helped Wall Street close higher on Wednesday, following some cautious sessions ahead of the Fed meeting.
The S&P 500 rose 0.7% to 6,886.80 points. The NASDAQ Composite rose 0.3% to 23,654.16 points, while the Dow Jones Industrial Average rose 1.1% to 48,057.87 points.
Beyond Oracle, more key earnings are due this week and the next. Broadcom and Costco (NASDAQ:COST) will report on Thursday, while memory chip major Micron Technology Inc (NASDAQ:MU) will report next week.