The Dow Jones Industrial Average (DJIA) surged to a fresh record on Thursday as investors rotated out of pressured tech names and into stocks tied more closely to economic growth following the Federal Reserve’s (Fed) latest interest rate cut. Visa (V) helped lead the Dow higher after an analyst upgrade, while the S&P 500 hovered near flat and the Nasdaq slipped as traders digested a sharp pullback in major tech stocks.

Tech stocks slump, dragged down by key names

Oracle’s (ORCL) disappointing revenue, higher spending outlook, and sharply negative free cash flow rattled markets and intensified concerns about how quickly companies can profit from large AI investments. The stock fell 12%, dragging other AI-related names lower and fueling debate about whether the sector’s rapid run-up has outpaced near-term fundamentals. Analysts cut price targets and flagged uncertainty around Oracle’s path forward.

Meanwhile, lower interest rates supported cyclicals and small-cap stocks, pushing the Russell 2000 to an intraday record alongside the Dow. Investors considered the possibility of a year-end 'Santa Claus rally,' even as some strategists warned of potential 2025–2026 headwinds, including AI-sector fatigue, political shifts, and a change in Fed leadership.

US economic data takes a back seat to rate cut focus

Outside equities, jobless claims jumped meaningfully following the holiday period, though continuing claims fell sharply. In corporate news, OpenAI unveiled its new GPT-5.2 model, aimed at boosting productivity features. At the same time, Rivian announced it is developing its own AI chip to reduce reliance on Nvidia and accelerate its autonomous-driving roadmap.

Dow Jones daily chart

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