Stocks Slip Before the Open as Oracle Dents Sentiment After Fed Cut

December S&P 500 E-Mini futures (ESZ25) are down -0.35%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.65% this morning as Oracle rekindled worries about the massive spending tied to artificial intelligence, overshadowing optimism over the Federal Reserve’s latest interest-rate cut.

Oracle Corporation (ORCL) plunged over -12% in pre-market trading after the software and cloud-computing company posted weaker-than-expected FQ2 cloud sales and raised its full-year capital expenditures forecast. The company’s results brought renewed attention to concerns over tech valuations and whether heavy spending on AI infrastructure will ultimately pay off. Investors will get another read on the AI trade’s strength when Broadcom releases its earnings after the close.

Notably, stock index futures pared earlier losses of more than 1% as dip buyers stepped in. Lower bond yields today are also helping limit losses in equity futures.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. GE Vernova (GEV) surged over +15% and was the top percentage gainer on the S&P 500 after the energy company increased its earnings projections and boosted its dividend and share buyback authorization. Also, Nike (NKE) rose more than +3% and was the top percentage gainer on the Dow after Guggenheim initiated coverage of the stock with a Buy rating and $77 price target. In addition, Photronics (PLAB) jumped over +45% after the company posted better-than-expected FQ4 results and provided upbeat FQ1 guidance. On the bearish side, shares of mobile grocery delivery firms slipped after Amazon.com announced it had expanded same-day delivery for perishable groceries to more than 2,300 cities and towns, with Uber Technologies (UBER) falling more than -5% to lead losers in the S&P 500 and DoorDash (DASH) dropping over -4%.

Economic data released on Wednesday showed that the U.S. employment cost index rose +0.8% q/q in the third quarter, weaker than expectations of +0.9% q/q.

As widely expected, the Federal Reserve lowered interest rates for the third consecutive time yesterday. The Federal Open Market Committee voted 9-3 to lower the target range for the Fed funds rate by a quarter percentage point to 3.50%-3.75%. Fed Governor Stephen Miran dissented in favor of a half-point rate cut, while Kansas City Fed President Jeff Schmid and Chicago Fed President Austan Goolsbee dissented in favor of keeping rates unchanged. In its post-meeting statement, the committee made a slight adjustment to its language, suggesting greater uncertainty about the timing of its next rate cut. In their updated economic projections, officials’ median forecasts pointed to one quarter-percentage-point cut in 2026 and another in 2027. In addition, policymakers authorized new purchases of short-term Treasury securities to ensure an “ample” level of bank reserves.

At a press conference, Chair Jerome Powell indicated that the Fed had likely done enough to ease the threat to employment while keeping rates sufficiently high to continue easing inflation pressures. “This further normalization of our policy stance should help stabilize the labor market while allowing inflation to resume its downward trend toward 2% once the effects of tariffs have passed through,” Powell said.

“The Fed emphasized that future moves will be data-dependent, shifting firmly to a meeting-by-meeting approach,” said Daniel Siluk, a portfolio manager at Janus Henderson Investors.

Meanwhile, U.S. rate futures have priced in an 80.1% chance of no rate change and a 19.9% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.

Today, investors will focus on U.S. Initial Jobless Claims data, which is set to be released in a couple of hours. Economists expect this figure to be 220K, compared to last week’s number of 191K.

U.S. Trade Balance data for September will also be released today. The data was originally scheduled for release on November 4th, but was delayed due to the government shutdown. Economists anticipate that the trade deficit will widen to -$62.5 billion from -$59.6 billion in August.

U.S. Wholesale Inventories data will be released today as well. Economists forecast that the final September figure will come in at +0.1% m/m.

In addition, market participants will monitor earnings reports from several notable companies, with Broadcom (AVGO), Costco (COST), Ciena Corp. (CIEN), and Lululemon Athletica (LULU) scheduled to report their quarterly results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.143%, down -0.67%.

The Euro Stoxx 50 Index is up +0.44% this morning, defying a decline in U.S. stock index futures triggered by AI-related concerns. Gains in bank and industrial stocks are leading the overall market higher on Thursday. Limiting gains, technology stocks fell as investors reacted to a steep drop in Oracle shares. Meanwhile, the Swiss National Bank kept its key rate at 0% for the second consecutive meeting, as expected, but indicated it is prepared to cut rates below zero if a prolonged period of declining prices threatens. “The SNB will continue to monitor the situation and adjust its monetary policy if necessary, in order to ensure price stability,” the bank said in a statement. In other news, two German economic institutes said on Thursday that the country’s economy has stabilized at a low level but remains stuck in a period of only modest growth, with the planned fiscal expansion next year expected to offer only limited support. In corporate news, Naturgy Energy Group SA (NTGY.E.DX) slid over -5% after BlackRock sold a 7.1% stake in the Spanish gas utility for roughly 1.7 billion euros.

The European economic data slate is mainly empty on Thursday.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.70%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.90%.

China’s Shanghai Composite Index closed lower today as investors awaited the country’s key meeting for additional guidance on next year’s policy agenda. Property stocks slumped on Thursday, likely due to some profit-taking after sharp gains the previous day following a Bloomberg News report that China is weighing new measures to revive its troubled property sector. Semiconductor stocks also retreated. Investors are looking ahead to the coming year-end Central Economic Work Conference, where senior officials will outline their policy priorities and discuss key economic targets for 2026. Market participants will be watching closely for indications of Beijing’s willingness to continue its state-backed consumer trade-in programs. “We keep our expectations realistic and expect ‘around 5%’ growth target and incremental fiscal funds of 1 trillion yuan,” according to Citi analysts. Meanwhile, the World Bank said on Thursday that China’s economy remained solid in the third quarter, bringing year-to-date GDP growth to 5.2% year-over-year. In corporate news, ZTE Corp. plunged -10% after Reuters reported that the telecom equipment maker may have to pay over $1 billion to the U.S. government to settle longstanding foreign bribery allegations.

Japan’s Nikkei 225 Stock Index reversed early gains and closed lower today. The benchmark index opened higher, tracking overnight gains on Wall Street after the Fed cut rates for the third consecutive time, but those gains were later wiped out by declines in technology stocks. Tech stocks were dragged by a more than 7% slump in SoftBank Group as Oracle tumbled in extended U.S. trading after reporting weaker-than-expected FQ2 cloud sales and raising its full-year capital expenditures forecast. Oracle serves as a partner for SoftBank Group’s AI projects. Meanwhile, Japanese government bonds climbed on Thursday after a 20-year bond auction attracted the strongest demand since 2020. Naoya Hasegawa, chief bond strategist at Okasan Securities, said, “The auction was very strong despite uncertainties surrounding the bond yields, such as the budget and the JGB issuance plans for the next fiscal year, as well as where the Bank of Japan’s terminal rate will be.” The Nikkei business daily reported on Thursday that Japan’s government plans to introduce additional tax incentives to encourage corporate investment, even as concerns mount over the country’s rising debt. On the economic front, a government survey showed that business sentiment among major Japanese firms hit a 1-year high in the fourth quarter, highlighting ongoing resilience despite trade frictions, growth worries, and rising fiscal risks. In other news, foreign investors bought a net 96.8 billion yen worth of Japanese stocks in the week ending December 6th, according to data from the Ministry of Finance. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -2.71% to 27.26.

The Japanese BSI Large Manufacturing Conditions Index stood at 4.7 in the fourth quarter, stronger than expectations of 4.1.

Pre-Market U.S. Stock Movers

Oracle Corporation (ORCL) plunged over -12% in pre-market trading after the software and cloud-computing company posted weaker-than-expected FQ2 cloud sales and raised its full-year capital expenditures forecast.

Oxford Industries (OXM) tumbled more than -23% in pre-market trading after the clothing company cut its full-year guidance.

PayPal Holdings (PYPL) fell over -1% in pre-market trading after BofA downgraded the stock to Neutral from Buy.

Planet Labs (PL) surged over +17% in pre-market trading after the company posted upbeat Q3 results and raised its full-year revenue guidance.

Roku (ROKU) climbed more than +4% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $135.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - December 11th

Broadcom (AVGO), Costco (COST), Ciena Corp (CIEN), Lululemon Athletica (LULU), RH (RH), Manchester United (MANU), Kestra Medical Technologies (KMTS), Quanex Building Products (NX), Mitek (MITK), Frequency Electronics (FEIM), Lovesac (LOVE), Comtech (CMTL), Vera Bradley (VRA), Destination XL Group (DXLG), Live Ventures (LIVE).