Dip Buyers Return as Oracle Plunge Sparks Market Rebound

US stock futures pared earlier declines as bargain hunters stepped in, easing the slide triggered by fresh anxiety over Oracle Corp.’s plans for massive spending on artificial-intelligence infrastructure a move that sparked a broad pullback from risk-sensitive assets.

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Futures tied to the S&P 500 were down 0.4% after clawing back part of an intraday drop that reached 1.1%. Nasdaq 100 futures also recovered from an earlier 1.6% slump. Oracle widely seen as a gauge of investor appetite for AI-driven capital investment plunged more than 13% in premarket trading after reporting cloud revenue that fell short of expectations and boosting its 2026 capital expenditure forecast by an additional $15 billion, taking the total to $50 billion.

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Skepticism toward AI giants lingered across markets. Nvidia Corp. slipped 1.5%, leading losses among the Magnificent Seven. Bitcoin also weakened, dropping more than 2% and hovering just above $90,000, while the dollar edged slightly lower.

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Oracle’s update reignited familiar questions around tech valuations and whether the enormous spending tied to AI infrastructure will ultimately justify itself concerns that fueled volatile trading throughout November.

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Although the AI trade has been a major force behind the S&P 500’s impressive gains this year, renewed spending worries have prompted some investors to diversify as the backdrop for the US economy remains relatively strong.

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“Markets have become far more cautious about AI-related capex. It’s a notable shift from mid-2025, when even the slightest hint of rising investment budgets sparked enthusiasm,” said Susana Cruz, strategist at Panmure Liberum. “Oracle has consistently been the weakest link, mostly because so much of its investment plan is being financed through debt.”

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Investors will get another key read on the AI theme when Broadcom Inc. posts results after the closing bell. The stock has soared more than 180% since its April trough, expecting an earnings that meet or slightly exceed forecasts, supported by continued spending increases from hyperscale cloud clients.

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Oracle’s earnings release came shortly after the S&P 500 ended Wednesday just below a record high, propelled by the Federal Reserve’s latest interest-rate cut and Chair Jerome Powell’s upbeat view of the economic outlook.

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Traders took comfort in policymakers leaving the option open for additional easing in the coming year, even though three officials dissented from the quarter-point cut. Market expectations remain anchored around two cuts in 2026, despite the Fed’s updated projections pointing to only one.

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“The impact from Oracle has overshadowed the Fed, which says a lot given how concentrated the market has become around a single theme AI,” said Alberto Tocchio, portfolio manager at Kairos Partners. “This doesn’t mean AI leadership is over or that we’re in a bubble, but it’s a reminder that we need a broader market foundation.”

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US Treasuries pushed higher after the rate cut was accompanied by a new plan to purchase Treasury bills and rebuild bank reserves. The 10-year yield held its advance on Thursday after initial jobless claims came in higher than expected for the week ended Dec. 6, slipping one basis point to 4.14%.

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Powell signaled that the Fed has likely done enough to stabilize the labor market, while keeping interest rates sufficiently restrictive to continue easing inflation pressures. Officials also lifted their median US growth forecast for 2026 to 2.3%, up from the 1.8% projection in September. Their inflation outlook improved as well, with expectations for 2026 trimmed to 2.4% from 2.6%.

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“The Fed’s ‘hawkish-but-optimistic’ move reinforces the message: stronger growth in 2026 and quicker disinflation,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Cuts are still happening, but they’re no longer automatic and historically, that’s a supportive setup for equities.”

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In commodities, oil slipped back toward its lowest level since October, mirroring broader weakness across risk assets. Silver continued its strong run, stretching its record high to above $62 an ounce.

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