Oracle Nosedive May Weigh On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to give back ground after moving mostly higher over the course of the previous session.

A steep drop by shares of Oracle (ORCL) is likely to weigh on Wall Street, as the software giant is plunging by 13.1 percent in pre-market trading.

The slump by Oracle comes after the company reported fiscal second quarter earnings that exceeded analyst estimates but weaker than expected revenues.

Other AI-related stocks like Nvidia (NVDA) and Advanced Micro Devices (AMD) are also seeing notable pre-market weakness, potentially reflected renewed valuation concerns.

Uncertainty about the outlook for interest rates may also generate some selling pressure following the Federal Reserve’s monetary policy announcement on Wednesday.

While the Fed cut rates by another quarter point, as widely expected, officials’ projections showed significant differences of opinion about further rate cuts.

After showing a lack of direction for much of the session, stocks moved mostly higher in the latter part of the trading day on Wednesday following the Federal Reserve’s interest rate decision.

The major averages all moved to the upside on the day after ending Tuesday’s choppy trading session narrowly mixed.

The Dow jumped 497.46 points or 1.1 percent to 48,057.75, the S&P 500 climbed 46.17 points or 0.7 percent to 6,886.68 and the Nasdaq rose 77.67 points or 0.3 percent to 23,654.16.

The late-day strength on Wall Street came after the Fed announced its widely expected decision to cut interest rates by another quarter point, matching the rate cuts seen in September and October.

The Fed said it decided to lower the target range for the federal funds rate by 25 basis points to 3.50 to 3.75 percent.

While a majority of Fed officials voted to cut rates by another quarter point, three cast dissenting votes for the first time since September 2019.

Fed Governor Stephen Miran preferred lowering rates by 50 basis points, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid preferred to leave rates unchanged.

The central bank’s latest summary of economic projections also showed significant divisions about the outlook for rates.

The forecast for rates at the end of 2026 was unchanged from September at a range of 3.25 to 3.50 percent, suggesting just one more quarter point rate cut next year.

However, the closely watched “dot plot” of individual officials’ expectations showed widely divergent views, with one official forecasting rates at a range of just 2.0 to 2.25 percent by the end of 2026 and some predicting higher rates.

The divided views among Fed officials come as the central bank seeks to balance its dual goals of achieving maximum employment and inflation at the rate of 2 percent over the longer run.

Despite the mixed views, traders seem optimistic about the outlook for rates, potentially reflecting hopes for a move dovish regime under President Donald Trump’s new Fed Chair choice.

“We’re not surprised to see near term optimism in the markets given that the Fed continues to cut rates even though the economy is growing,” said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

He added, “However, we think the rose colored glasses may come off once investors realize that the path to lower interest rates may take longer – or may not materialize at all – to the extent that they believe it will.”

Housing stocks showed a substantial move to the upside following the Fed announcement, driving the Philadelphia Housing Sector Index up by 3.1 percent.

Significant strength also emerged among transportation stocks, as reflected by the 2.7 percent surge by the Dow Jones Transportation Average.

Banking, computer hardware and pharmaceutical stocks also saw considerable strength, while software stocks showed a notable move to the downside.

Commodity, Currency Markets

Crude oil futures are slumping $0.65 to $57.81 a barrel after rising $0.21 to $58.46 a barrel on Wednesday. Meanwhile, after slipping $11.50 to $4,224.70 an ounce in the previous session, gold futures are climbing $12.40 to $4,237.10 an ounce.

On the currency front, the U.S. dollar is trading at 155.29 yen versus the 156.01 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1728 compared to yesterday’s $1.1694.

Asia

Asian markets witnessed weak sentiment in Thursday’s trading as markets digested the Fed’s widely expected rate cut, the forward guidance for 2026 and beyond, as well as the extent of dissent in the FOMC decision.

Though markets turned cautious in the aftermath of the Fed’s projection of a single rate cut for 2026, losses were limited by the less-than-expected hawkishness in the Fed’s guidance.

China’s Shanghai Composite Index slid 0.7 percent to finish trading at 3,873.32, versus the previous close of 3900.50. The day’s trading ranged between 3,862.82 and 3,904.96.

The Japanese benchmark Nikkei 225 Index slumped 0.9 percent to close trading at 50,148.82. The day’s trading range was between 49,932.5 and 50,864.

Mitsui jumped 4.85 percent. Panasonic Corp. as well as Advantest Corp. both followed with gains of more than 4.4 percent. Toppan Printing added 3.2 percent followed by Chugai Pharmaceutical that added 2.8 percent.

SoftBank Group Corp. led losses with a decline of 7.7 percent. Sumitomo Dainippon Pharma also declined 6.2 percent. Mitsubishi Heavy Industries, Mitsui Mining and Smelting Co. and Taiyo Yuden all declined more than 4 percent.

The Korean Stock Exchange’s Kospi Index shed 0.6 percent to close trading at 4,110.62. The day’s trading range was between 4,103.20 and 4,170.77.

The Hang Seng Index of the Hong Kong Stock Exchange edged slightly lower from the previous close to finish trading at 25,530.51. The day’s trading range was between a high of 25,801.34 and a low of 25,471.50.

Australia’s S&P/ASX200 Index closed trading at 8,592.00, gaining 2 percent from the previous close of 8579.40. The day’s trading range was between 8,574.10 and 8,658.90.

James Hardie Industries topped gains with a surge of 7.1 percent followed by Ramelius Resources that jumped 6.7 percent. Flight Centre Travel Group rallied 5.4 percent, Scentre Group added 4 percent, and Whitehaven Coal gained 3.1 percent.

Catalyst Metals topped losses with a decline of 8.9 percent. Aerospace business DroneShield plunged 6.6 percent followed by Mesoblast that erased 4.5 percent. Eagers Automotive as well as Austal both lost a little less than 4 percent in the day’s trading.

The NZX 50 Index of the New Zealand Stock Exchange rose 0.2 percent to close trading at 13,395.87, versus the previous close of 13,371.06. The day’s trading ranged between 13,355.70 and 13,433.41.

Summerset Group rallied 3.2 percent followed by Serko, Ryman Healthcare, Fonterra Shareholders Fund as well as Argosy Property that rallied more than 2 percent.

EROAD tumbled 5.6 percent. EBOS and Freightways lost more than 2 percent followed by Sky Network Television as well as NZX that declined more than 1 percent.

Europe

The major European markets moved slightly higher after a cautious start on Thursday as investors digested the Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s comments following the monetary policy meeting.

The Fed lowered interest rate by 25 basis points, as widely expected, on Wednesday.

At a news conference following the decision, Powell said the Fed would have to “wait and see” before making its next move.

Fed members suggested just one further cut in their 2026 projection, but traders bet risks are skewed towards more cuts.

Meanwhile, the Swiss National Bank decided today to keep its key interest rate at zero percent. SNB’s decision comes against the backdrop of zero percent inflation in Switzerland in November, which is at the lower end of the central bank’s target range of 0-2 percent.

Amid somewhat lackluster moves, the benchmark indices of Germany, France and the UK edged up slightly.

While the French CAC 40 Index is up by 0.6 percent, the German DAX Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is just above the unchanged line.

The Magnum Ice Cream Company stock, up 4.8 percent, was the top gainer in U.K.’s FTSE 100 index. Ashtead Group surged 4 percent, while Convatec Group, Berkeley Group Holdings, Weir Group, Whitbread, Pearson, Sainsbury (J), Diageo and Metlen Energy & Metals gained 1.5 to 2.4 percent.

Entain drifted down 3.7 percent, while Associated British Foods and Informa lost 2.1 percent and 1.2 percent, respectively. Lloyds Banking Group, Natwest, The Sage Group and Smith & Nephew posted moderate losses.

In the German market, Daimler Truck Holding, Merck, Munich RE, Heidelberg Materials, Siemens, Deutsche Post, Brenntag, Rheinmetall, Commerzbank, BASF, Continental and Beiersdorf gained 1 to 3 percent.

Symrise drifted down 3 percent, while Deutsche Boerse, E.ON and SAP lost 2.2 to 2.7 percent. BMW lost about 1.4 percent.

In the French market, Schneider Electric climbed about 3 percent, attracting attention after the company said it plans a share buyback program of €2.5 billion-€3.5 billion and intends to pursue a divestment program of €1.0 billion- €1.5 billion in revenues, with both initiatives to be completed by 2030.

TP surged 3.5 percent. Saint Gobain, Capgemini and Carrefour gained 2.3 to 3 percent. Vinci, Pernod Ricard and AXA also posted strong gains.

Meanwhile, Stellantis, Renault and Legrand shed 3.2 percent, 2.5 percent and 2.1 percent, respectively. STMicroElectronics dropped by about 1.6 percent.

U.S. Economic News

First-time claims for U.S. unemployment benefits rebounded by more than expected in the week ended December 6th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims rose to 236,000, an increase of 44,000 from the previous week’s revised level of 192,000.

Economists had expected jobless claims to climb to 220,000 from the 191,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average crept up to 216,750, an increase of 2,000 from the previous week’s unrevised average of 214,750.

Reflecting a sharp increase in the value of exports, the Commerce Department released a report on Thursday showing the U.S. trade deficit unexpectedly narrowed in the month of September.

The Commerce Department said the trade deficit shrank to $52.8 billion in September from a revised $59.3 billion in August.

Economists had expected the trade deficit to widen to $63.3 billion from the $59.6 billion originally reported for the previous month.

The unexpectedly narrower trade deficit came as the value of exports jumped by 3.0 percent to $289.3 billion, while the value of imports climbed by 0.6 percent to $342.1 billion.

At 10 am ET, the Commerce Department is due to release its report on wholesale inventories in the month of September. Wholesale inventories are expected to inch up by 0.1 percent.

The Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds at 11 am ET.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $22 billion worth of thirty-year bonds.