Oracle’s AI-Driven Capex Spurs Market Volatility Amid Rate-Cut Debates
Oracle's substantial AI data-center capital expenditure raised its quarterly spend to about $12 billion and increased its full-year capex outlook to roughly $50 billion, up $15 billion from September. This aggressive spending triggered an over 11% one-day stock drop, the largest since January, and sent Oracle's credit risk to a 16-year high.
The sharp decline in Oracle's stock renewed concerns that AI spending may outpace returns and strain corporate balance sheets, which weighed on broader technology sector sentiment. Consequently, U.S. stocks fell while the crypto market remained relatively stable and less correlated with equities, reflecting traders' selective approach toward risk.
In the cryptocurrency market, Bitcoin traded above $92,000, rising approximately 2.6% on the day, with Ether climbing toward $3,260. Solana (SOL) outperformed, jumping more than 6%, while XRP and BNB recorded smaller gains. Dogecoin saw modest increases but remained down for the week.
The Nasdaq 100 slipped as investors rotated away from AI-linked stocks toward other sectors amid growing questions regarding AI's economic impact and earnings momentum. Analysts noted a divide among major institutions on the Federal Reserve's path, with some anticipating further rate cuts as inflation improves, and others expecting a January pause or later easing. These discussions highlighted tensions in interpreting policy signals.
Traders emphasized preserving trend structure and risk management rather than chasing upside, concentrating flows in large-cap assets. This suggests that near-term market direction depends more significantly on earnings and liquidity conditions than on policy alone.
