Traders work on the floor at the New York Stock Exchange on June 18, 2025.<\/p>\n
Brendan McDermid | Reuters<\/p>\n
The Dow Jones Industrial Average<\/a> reached new heights on Thursday as a Federal Reserve interest rate cut followed by disappointing Oracle results prompted investors to move out of high-flying tech stocks and into names that can benefit from a growing U.S. economy.<\/p>\n The 30-stock Dow rose 687 points, or 1.4%, and hit a new record high<\/a>, supported by a rise in Visa<\/a> shares after the name was upgraded at Bank of America<\/a>. The broad market S&P 500<\/a> traded up 0.2%, while the Nasdaq Composite<\/a> pulled back 0.3%.<\/p>\n Oracle<\/a> shares tumbled 10% after the cloud computing company posted disappointing quarterly revenue<\/a> and raised its spending forecast, heightening concerns about the company’s debt.<\/p>\n The report added more fuel to the debate about how quickly tech companies will be able to see returns on their artificial intelligence investments, spurring a rotation trade. Other AI plays were trading lower, including Nvidia<\/a> and Broadcom<\/a>, which were each down 1%. Meanwhile, cyclical stocks like Home Depot<\/a> were higher.<\/p>\n “The market is properly concerned with Oracle and, by extension, with the AI trade in general, because there’s literally trillions of dollars of commitments out there, but there’s clearly a difficulty in figuring out how this is going to transpire, and Oracle, to some extent, is acting like the canary in the coal mine,” said Steve Sosnick, chief strategist at Interactive Brokers. “The market’s right to rotate a little bit away from this.”<\/p>\n The downbeat sentiment toward tech put a damper on the momentum garnered during the previous session, which saw the S&P 500 close just inches away from a new record after a divided Fed announced an interest rate cut for the third time<\/a> this year. That places its key overnight borrowing rate at a 3.5%-3.75% range. The central bank also ruled out a rate hike<\/a> in the path ahead. <\/p>\n