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 investors exited high-flying tech stocks following Oracle’s results, even as the Federal Reserve’s latest interest rate cuts boosted the U.S. stock market earlier.
The Dow Jones Industrial Average (30 stocks) rose 431 points (0.9%) 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 13% after the cloud computing company reported disappointing quarterly revenue and raised spending forecasts, raising concerns about the company’s debt.
The report further fueled the debate about how quickly tech companies can benefit from AI investments, prompting investors to rotate out of tech stocks and into stocks likely to benefit from the low interest rate environment and U.S. economic growth. 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.
The S&P 500 index closed inches from a new record after a divided Fed announced its third interest rate cut of the year and ruled out raising rates, dampening the momentum gained during the previous session due to the economic downturn for the tech industry. 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 contradictory data on the state of the U.S. economy “could lead to increased volatility and risk premiums across risk markets, including equities, heading into 2026.”
