U.S. stocks pulled back Thursday after Oracle Corp. posted its steepest one-day decline in nearly a year, raising fresh concerns that heavy artificial intelligence spending may be outpacing returns. Traders appeared focused on preserving trend structure rather than chasing gains, with flows concentrated in large-cap assets.

Equities: Oracle Leads Pullback

Oracle shares tumbled more than 11%, marking the biggest drop since January, after the company disclosed a sharp increase in capital expenditures tied to AI data centers and infrastructure. Quarterly spending rose to roughly $12 billion, well above expectations, while the full-year capex outlook jumped to about $50 billion — a $15 billion increase from the September forecast.

The revelation reignited doubts over when AI investments will translate into meaningful cloud revenue, sending Oracle’s stock to its lowest level since early 2024 and pushing a measure of its credit risk to a 16-year high. The broader tech sector, particularly AI-linked names that fueled much of this year’s rally, came under pressure, with the Nasdaq 100 slipping as investors rotated cautiously into other areas.

Crypto: Selective Stability

Meanwhile, the crypto market traded with relative stability, modestly decoupling from equity weakness as traders remained selective about risk. Bitcoin regained footing above $92,000, extending gains of about 2.6% after holding key support earlier this week. The largest token stabilized following a volatile stretch that briefly pushed it toward the low $90,000s.

Ether rose in tandem with Bitcoin, approaching $3,260, while SOL outperformed major tokens with a jump of more than 6%, reflecting renewed appetite for higher-beta layer-1 assets. XRP and BNB posted smaller gains, remaining range-bound as investors awaited clearer signals on spot ETF developments and broader market direction. Dogecoin edged higher but stayed lower on a weekly basis, continuing to track broader market sentiment rather than token-specific catalysts.

“Major institutions are increasingly divided on the forward path,” analysts at Bitunix told CoinDesk. “Some argue improving inflation supports further cuts beginning in March, while others expect a January pause, a wait-and-see approach through the first half, or even a delay in easing until after June.”

“Several Wall Street firms noted that this ‘hawkish cut’ highlights the FOMC’s growing difficulty maintaining cohesion under Powell’s leadership,” the analysts added.

Market Outlook

Investors are digesting both a more fractured Federal Reserve outlook and growing scrutiny of AI-related spending. With markets increasingly sensitive to capital discipline rather than top-line growth alone, near-term direction is likely to hinge less on policy signals and more on whether earnings and liquidity can justify the next leg of risk-taking across equities and crypto.

For now, traders appear poised to remain tactical, favoring selective exposure to large-cap assets and high-quality crypto while carefully monitoring both corporate spending trends and broader macro conditions.