Market Jitters: Oracle's Earnings Shake Investor Confidence Amid Fed Rate Cuts

U.S. cloud computing giant Oracle's disappointing earnings have impacted AI stock values, dragging down S&P 500 and Nasdaq futures. Meanwhile, the Federal Reserve's interest rate cuts and Treasury purchases created shifts in bond yields and foreign exchange rates, further affecting global markets.

On Thursday, stocks took a dive following disappointing earnings from American cloud computing giant, Oracle, which raised alarms about AI profitability. This comes as bonds remained steady, and the U.S. dollar faced losses after the Federal Reserve slashed interest rates.

Oracle shares plummeted over 11% after hours, pulling S&P 500 futures 0.9% lower and impacting Nasdaq 100 futures by 1.3% in Asian markets. AI-related stocks took a hit in Tokyo as Oracle's earnings and revenue forecasts fell short, indicating that infrastructure spending isn't translating into profits as swiftly as investors expected.

Amid this backdrop, Japan's Nikkei dropped 1%, primarily due to a 7.5% decline in AI-exposed SoftBank Group shares. Meanwhile, Wall Street indexes rallied post-Fed rate cut, and the S&P 500 saw a rise of about 0.7%. The Fed's decision to reduce its benchmark rate by 25 basis points, alongside announcements to bolster liquidity through short-term Treasury purchases, underscored market apprehensions over its monetary policy trajectory.

(With inputs from agencies.)