Traders work on the floor of the New York Stock Exchange on June 18, 2025.
Brendan McDiarmid | Reuters
of Dow Jones Industrial Average Stocks hit new highs on Thursday as the Federal Reserve’s interest rate cut and subsequent disappointing results from Oracle prompted investors to move away from soaring tech stocks and into stocks that benefit from a growing U.S. economy.
The Dow Jones Industrial Average (30 stocks) rose 520 points (1.1%) to a new all-time high, backed by rising stock prices. visa Bank of America shares after name change. wide market S&P500 Although it decreased by 0.3%, Nasdaq Composite It pulled back 0.9%.
oracle Shares fell 14% after the cloud computing company reported disappointing quarterly revenue and raised spending forecasts, raising concerns about the company’s debt.
The report further spurred debate about how quickly tech companies can profit from AI investments and encouraged rotational trading. Other AI plays fell. Nvidia, broadcom and AMDeach fell 3%. coreweave It fell by 5%. On the other hand, cyclical stocks home depot It was more expensive.
Weak sentiment toward the tech industry dampened the momentum gained during the previous session, with the S&P 500 index closing inches from a new record after a divided Federal Reserve announced its third rate cut of the year and ruled out raising rates. The central bank’s Federal Open Market Committee cut the key overnight borrowing rate by a quarter of a percentage point to a range of 3.5% to 3.75%, signaling the pace of future rate cuts may slow.
Fed Chairman Jerome Powell said the Fed is “well placed to wait and see how the economy goes,” noting that President Donald Trump’s tariffs are driving inflation.
In addition to the three major indexes that ended Wednesday’s session in the green. Russell 2000 Index of small-cap stocks hit record closing prices. Small businesses tend to benefit from lower interest rates than larger businesses because their borrowing costs are more closely tied to market interest rates.
Although markets rallied towards the end of Wednesday’s trading, some investors are signaling caution going forward given the central bank remains in wait-and-see mode on the direction of future monetary policy.
“It’s not surprising that the market is optimistic in the short term, given that the Fed continues to cut interest rates even as the economy is growing,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. “However, the rose-colored glasses may come off if investors realize enough that they believe the path to lower rates may take longer or may not materialize at all.”
Ellen Hazen, chief market strategist at FL Putnam Investment Management, said increased uncertainty about future interest rates and conflicting data on the state of the U.S. economy “could lead to increased volatility and risk premiums across risk markets, including equities, into 2026.”
