Tech Stocks Slide as Oracle Woes and Rate Hikes Rattle Investors

U.S. tech stocks are under pressure on Thursday, with the S&P 500 and Nasdaq Composite both closing down 0.50% at 6,604.72 and 22,384.70, respectively. The Dow Jones Industrial Average also sheds 173.96 points, or 0.38%, to end at 45,947.32. Oracle, a key player in the recent AI boom, slides 5%, extending its losses for the third consecutive day.

Market Reaction to Oracle's Decline

Oracle's stock is off nearly 16% from its recent high, following a sell rating from Rothschild & Co. Redburn, which predicts a 40% pullback. The firm argues that the market overestimates the impact of Oracle's AI deals on its core cloud business. Keith Buchanan, senior portfolio manager at Globalt Investments, notes, 'Oracle had just a massive run-up. Some giveback and softness is probably warranted with how quickly and how dramatically the market cap has exploded.'

Yield Jump and Economic Data

The 10-year Treasury yield touches 4.2% after data shows initial jobless claims at a seasonally adjusted 218,000, below the 235,000 expected. This, along with a strong upward revision in second-quarter GDP to 3.8%, suggests the Federal Reserve may hesitate before cutting rates, a key concern for investors.

Broader Market Impact

Tesla, another tech giant, falls 4% as the broader market reacts to rising yields and economic data. CME Group, however, sees a nearly 2% rise after Citi upgrades its rating to buy from neutral, citing positive risk-reward and catalysts ahead.

Government Shutdown Concerns

Investors remain cautious ahead of the personal consumption expenditures price index due Friday and potential government shutdown. Louis Navellier, a market strategist, warns, 'If Congress fails to reach a deal to fund the federal government, the market could see some short-term volatility.'

References

• Stock market news for Sept. 25, 2025