U.S. Stocks Reach Record Highs Even as AI-Driven Tech Shares Fall

The S&P 500 and Dow Jones Industrial Average advanced on Thursday, each closing at fresh all‑time highs. The Russell 2000 index also finished the session at a record level after the U.S. Federal Reserve trimmed rates by a quarter‑point on Wednesday.

Nevertheless, a deeper look at individual equities reveals that the AI narrative is encountering headwinds. Oracle shares tumbled almost 11% after the company disclosed weaker‑than‑expected quarterly revenue, a decline that also dragged down other AI‑linked stocks such as Nvidia and Micron.

In after‑hours trading, Broadcom’s stock slipped 4.5% despite the chipmaker beating Wall Street’s earnings and revenue forecasts. CEO Hock Tan failed to assuage investor concerns that Google, Broadcom’s biggest customer, could increasingly produce its own chips, thereby reducing demand for Broadcom’s products. Additionally, rising memory prices threaten margins, and the firm’s recent chip partnership with OpenAI remains non‑binding, limiting its upside.

These dynamics helped explain why the tech‑heavy Nasdaq Composite fell 0.26%, even as the broader market set new records. The divergence suggests a rotation out of pure‑play technology stocks into other sectors. The S&P 500’s financials segment, for example, peaked at a fresh high, propelled by strong performances from Visa and Mastercard.

While the AI theme faces renewed scrutiny, other parts of the economy are benefitting from a resilient U.S. backdrop and the Fed’s rate‑cut momentum. Barring any unexpected shocks, market sentiment appears supportive of a robust holiday trading season.

New records for U.S. stocks. The S&P 500 and Dow Jones Industrial Average both reached fresh peaks on Thursday, but the Nasdaq Composite slipped lower, weighed down by Oracle’s earnings miss. In Europe, the Stoxx 600 closed 0.5% higher.

Disney to invest $1 billion in OpenAI. The entertainment giant will grant OpenAI’s video‑generation model Sora access to Disney’s copyrighted characters under a multiyear licensing arrangement, a move the company says will accelerate its AI capabilities.

SpaceX plans an IPO in 2026. Elon Musk confirmed the timeline in a recent post, following earlier reports that the space‑flight company is targeting a public listing next year. Musk also clarified that prior valuations in the $800 billion range were inaccurate.

Broadcom’s fourth‑quarter results beat expectations, with net income nearly doubling year‑over‑year and a strong outlook for the current quarter driven by AI demand. Despite the earnings beat, the stock fell in extended trading as investors weighed the aforementioned execution risks.

Analysts are revisiting Oracle’s price targets after the software giant delivered a perplexing earnings report that left investors questioning its growth trajectory in the AI‑driven enterprise market.

India’s $3.3 trillion opportunity for global fund houses. This year, BlackRock launched several joint mutual‑fund products with Jio BlackRock, marking its return to the Indian market after exiting in 2018. State Street is also reported to be in talks to acquire a stake in an Indian fund manager. The rapid financialization of household savings is fueling a surge in retail participation, expanding the pool of assets that global managers can service.