Risk Assets Slide as Oracle Earnings Compound Pressure Despite Fed Rate Cut

Risk assets faced broad pressure on Thursday, even after the Federal Reserve delivered a rate cut, as disappointing earnings from Oracle reignited concerns over AI-driven market hype.

Bitcoin (BTC), the world’s largest cryptocurrency by market value, hovered near $90,000, down 2.8% over the past 24 hours, according to CoinDesk data. Nasdaq futures, tracking the tech-heavy U.S. index, fell 0.8%.

Oracle reported its fiscal second-quarter 2026 results Wednesday, covering the period ending Nov. 30, 2025. Total revenue came in slightly below expectations, weighed down by declining legacy software sales and weak new license bookings.

The results underscored the growing gap between aggressive, debt-fueled AI infrastructure investments and the slower-than-expected revenue streams reaching company coffers.

The Financial Times highlighted that Oracle’s earnings were overshadowed by a $15 billion planned increase in data center spending and a 25% year-over-year jump in long-term debt, now totaling $99.6 billion. Cloud infrastructure revenue fell short at $4.1 billion, signaling further reliance on borrowing. Morgan Stanley projects Oracle’s net debt could soar to roughly $290 billion by 2028.

Shares of Oracle plunged more than 10% in after-hours trading, dragging down AI-focused stocks and sending bearish signals across crypto markets. The selloff renewed attention on Oracle’s five-year credit default swaps (CDS), financial instruments reflecting the market’s perceived default risk.

Oracle’s 5-year CDS spiked to its highest level since 2022, signaling a material repricing of risk. According to the Special Situations newsletter, “Historically, ORCL CDS traded around 20–40 bps, so 117 bps represents a material repricing of risk, but not a distressed profile.”

The newsletter added, “Oracle 5Y CDS looks eye-catching at $ORCL until you run the math—pricing in just a 1.93% annual default probability and a 9% cumulative five-year default probability.”