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Wall Street’s S&P 500 set a record closing high on Thursday as gains in consumer-focused and financial companies offset a steep sell-off in Oracle and declines in other technology companies.
The blue-chip S&P 500 rose 0.2 per cent, trimming earlier losses, while the tech-heavy Nasdaq Composite slipped 0.3 per cent.
Financial, consumer discretionary, industrial and materials groups all posted significant gains on Thursday as traders shifted away from tech. Cruise companies Royal Caribbean, Carnival and Norwegian Cruise Lines were among the biggest gainers, with gold miner Newmont and retailers Dollar General and Dollar Tree also jumping.
US stocks had risen on Wednesday after the Federal Reserve cut interest rates to a three-year low, as Wall Street had widely anticipated.
“The tone of the press conference was less hawkish than feared,” said Mohit Kumar, chief European economist at Jefferies, pointing to Fed chair Jay Powell’s focus on weakness in the labour market. “The door remains open for further easing,” Kumar said.
However, a more than 10 per cent slide in shares of Oracle on Thursday damped the enthusiasm on Wall Street.
In earnings published after the market closed on Wednesday, Oracle’s third-quarter revenue of $16.2bn fell short of analysts’ estimates and forecasted capital expenditure jumped, bringing a swift end to a stock market bounce prompted by the Fed’s decision earlier in the day.
The database company’s shares dropped as much as 16 per cent on Thursday. Other tech stocks including Nvidia, Intel and Alphabet also fell.
“Even as investors were reassured by the Fed’s latest rate cut, familiar concerns about AI are still very much top of mind right now,” wrote Jim Reid, global head of macro research at Deutsche Bank, describing Oracle’s results as “disappointing”.
Neil Birrell, chief investment officer at Premier Miton, said the sharp drop in Oracle’s share price showed “the massive sensitivity to expectations” for big US tech companies.
