Dow Jones and Nasdaq Index: Indices Diverge as Blue Chips Gain While Tech Stocks Slide

Dow climbs while Nasdaq sinks as tech selloff deepens

The Dow outperformed on Thursday even as the Nasdaq slid to a one-week low, giving traders a split session shaped by pressure in technology and renewed concern over artificial intelligence spending.

By 16:33 GMT, the Dow gained 1% to 48,538.97, supported by strength in financials, while the S&P 500 slipped 0.37% to 6,861.02 and the Nasdaq dropped 1.09% to 23,397.323. The mixed close reflected strong rotation into value sectors after the Federal Reserve eased policy by 25 bps and signaled no immediate plans to resume tightening.

Tech weakness accelerated following Oracle’s sharp 14% selloff. Quarterly forecasts came in below expectations and the company raised its annual spending outlook, unsettling investors who expected faster profitability from AI investments. The jump in Oracle’s credit default protection signaled market concern over its debt-funded expansion, placing the stock on track for its steepest quarterly loss since 2002.

Is AI pressure driving broad sector selling

Technology led the S&P 500 lower with a 1.82% decline, while the Philadelphia Semiconductor Index fell 2% as Nvidia slid 3.1%.

AI infrastructure names extended losses: CoreWeave dropped 5.7%, Applied Digital fell 3.6%, and Nebius declined 4.4%.

Sector performance showed Materials at the top with a 2.02% rise, followed by Financials up 1.31% and Health gaining 1.17%. Communication Services eased 0.79%, while Energy slipped 0.33%.

The VIX edged up to 16.1, reinforcing a slight increase in hedging demand.

How are traders interpreting the Fed’s latest move

Relief carried over from Wednesday’s rate cut, as Chair Jerome Powell avoided signaling an extended easing cycle but also dismissed the prospect of renewed hikes.

Traders are pricing in at least 50 bps of cuts next year, supported by expectations that the next Fed Chair could adopt a more dovish stance.

The environment benefited rate-sensitive pockets of the market, with the Russell 2000 rising 0.6%. Goldman Sachs climbed 1.4%, helping drive the Dow’s advance.

Which corporate stories shaped stock-specific action

Jobless claims increased to 236,000, above the 220,000 estimate, adding to views that labor cooling may give the Fed additional room to ease.

Disney rose 2% after announcing a $1 billion equity investment in OpenAI. Crypto-related equities weakened as bitcoin briefly dipped below $90,000, pushing Strategy down 3.3% and Bit Digital lower by 3.1%. Market breadth favored buyers, with NYSE advancers outpacing decliners nearly 2-to-1.

What’s the near-term outlook for traders

Tech remains vulnerable as AI spending concerns restrain appetite for high-growth names. Broader indexes may stabilize if expectations for additional Fed easing hold, but traders will focus on incoming labor and inflation data to gauge whether Thursday’s rotation can sustain momentum.

More Information in our Economic Calendar.