Oracle's AI Warning Sends Ripples Through Global Markets

World stocks faced stagnation after Oracle's cautionary statement on AI profitability. The dip in Oracle's shares affected major markets, despite a U.S. Federal Reserve rate cut. Concerns over AI spending and its slow profit returns were highlighted, impacting tech stocks worldwide.

Global stock markets hit a pause on Thursday as Oracle's warning about AI profitability created ripples, overshadowing relief from the U.S. Federal Reserve's recent interest rate cut. While bonds firmed, the dollar endured losses, pending reactions from Asian and European heavyweights.

Oracle's shares plummeted over 11% in U.S. after-hours trading, influencing Nasdaq futures and Japan's Nikkei, alongside a significant drop in SoftBank shares due to their ties with Oracle on the Stargate project. Despite muted growth in Europe, lower global interest rate prospects prompted gains in other sectors.

Analysts, including Hargreaves Lansdown's Matt Britzman, noted Oracle's central role in the AI spending debate, citing its weak cash flows compared to giants like Google. As eyes remain on global interest rate trends, a cautious outlook toward the U.S. dollar persists.

(With inputs from agencies.)