AI-Linked Stocks Under Pressure After Oracle's Results Overshadow Fed's Rate Actions and Projections

Barry Adams
11 Dec, 2025
New York City

High-flying technology stocks faced sharp headwinds after Oracle's quarterly results and outlook raised worries about the sustainability of elevated investment in AI infrastructure.  

The S&P 500 index decreased 1%, and the tech-heavy Nasdaq Composite declined 2%, as investors shifted focus away from the Fed's rate actions. 

The Federal Reserve lowered its short-term fed funds rate range for the third time in a row and signaled fewer cuts in 2026. 

The fed funds rate range was cut by 25 basis points to between 3.50% and 3.75%, and the divided rate-setting committee focused on weakening labor market conditions. 

The Federal Open Market Committee left its rate outlook unrevised, signaling a possible one rate cut in 2026, revised higher its 2026 GDP growth outlook to 1.7% from 1.6%, and left jobless rate estimates unchanged at 4.5% in 2025 and 4.4% in 2026. 

In the absence of economic data because of the government shutdown, Fed officials worried that the "low-hire, low-fire" labor market may be weaker than the data suggests. 

The central bank is likely to hold off from revising rates at the end of its next meeting in late January, as it evaluates additional economic data and the impact of the Trump administration's aggressive tariffs on goods. 

The Federal Open Market Committee's projections signaled one possible rate cut in 2026, while the market is still holding out for as many as two 25 basis point rate cuts in the next year. 

 

U.S. Stock Movers 

Oracle plunged 11% to $198.69 after the company's revenue in its latest quarter fell short of market expectations. 

Adobe Inc. declined 0.4% to $341.05, and the graphic design software company reported better-than-expected results in its fiscal fourth quarter. The software company estimated a double-digit increase in recurring revenue in fiscal 2026, driven by AI-supported tools. 

Synopsys Inc. decreased 0.8% to $472.0, and the electronic design automation software company reported better-than-expected earnings in its fiscal fourth quarter.