Market Rebounds Amid Federal Reserve Update and AI Concerns

The S&P 500 and Dow hit record highs after a Federal Reserve policy update that was less aggressive than expected. Oracle shares fell 10.8% after disappointing forecasts, affecting the tech-heavy Nasdaq. The Dow and small-cap indices performed well as investors reacted to potential economic growth.

The S&P 500 and Dow Jones Industrial Average soared to record closing highs on Thursday, buoyed by a Federal Reserve policy update that proved less aggressive than anticipated. However, Oracle's financial forecast created turbulence for the tech-dominated Nasdaq, reminding investors of the possible risks tied to artificial intelligence investments.

Oracle's shares plummeted 10.8% as the firm's quarterly predictions missed analyst expectations, raising alarms about its substantial push into AI amid soaring debt concerns. Meanwhile, the Dow raced ahead, gaining 646.26 points, or 1.34%, lifting it above its previous record, while the Russell 2000 and S&P 500 value index also performed strongly.

Investors digested the central bank's latest moves, happy with the Fed's decision to cut borrowing costs by 25 basis points, noting indications of potential future rates cuts despite ongoing inflation. The labor market, evidenced by rising jobless claims, remains a crucial focus, underscoring the cautious optimism reflected in these market movements.

(With inputs from agencies.)