NEW YORK (AP) — Most U.S. stocks are rising on Thursday, but a sell-off for Oracle is weighing on Wall Street as investors question whether its big spending on artificial-intelligence technology will pay off.
The S&P 500 fell 0.4% and pulled further from its all-time high, which was set in October. Drops for AI-related stocks dragged the Nasdaq composite down 1.2%, while the Dow Jones Industrial Average was doing much better with a gain of 465 points, or 1%, as of 11:30 a.m. Eastern time.
Oracle tumbled 14.4% and had briefly been on track for its worst day since 2001, when the dot-com bubble was still deflating. It reported 14% growth in revenue for the latest quarter, which came up just short of analysts' expectations, even though its profit topped forecasts.
Doubts remain about whether all the spending that Oracle is doing on AI technology will produce the payoff of increased profits and productivity that proponents are promising. Analysts said they were surprised by how much Oracle may spend on AI investments this fiscal year, and questions continue about how the company will pay for it.
Such doubts are weighing on the AI industry broadly, even as many billions of dollars continue to flow in. Those questions had helped drag the broad U.S. stock market through some sharp and scary swings last month.
Nvidia, the chip company that’s become the poster child of the AI boom and is raking in close to $20 billion each month, fell 3.6% Thursday. It was the single heaviest weight on the S&P 500.
Oracle Chairman Larry Ellison said it will continue to buy chips from Nvidia, but it’s now taking a policy of “chip neutrality,” where it will use “whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”
Even with the struggles for AI-related companies, most of the U.S. market rose Thursday, including three out of every four stocks in the S&P 500.
Eli Lilly helped lead the way and climbed 3.6% after announcing encouraging results from a clinical trial for adult patients who are obese or overweight and have knee osteoarthritis, without diabetes.
The Walt Disney Co. added 1.2% after OpenAI said the entertainment giant is investing $1 billion in it. It's part of a three-year agreement that will also allow OpenAI to use more than 200 Disney, Marvel, Pixar and Star Wars characters to generate short, user-prompted social videos.
Planet Labs PBC soared 30.6% after the provider of satellite images used by governments and businesses reported stronger results for the latest quarter than analysts expected.
On the losing end of Wall Street, Oxford Industries tumbled 23.1% after the company behind Tommy Bahama and Lilly Pulitzer pointed to how its customers have been seeking out deals and are “highly value-driven.” CEO Tom Chubb said the start of the holiday shopping season has been weaker than the company expected, and it cut its forecast for revenue for the full year.
Vera Bradley, meanwhile, dropped 22.9% after reporting a larger loss for the latest quarter than expected.
In the bond market, Treasury yields slipped after a report said the number of U.S. workers applying for unemployment benefits jumped last week by more than economists expected. That’s a potential indication of rising layoffs and could encourage the Federal Reserve to keep cutting interest rates to bolster the job market.
A day earlier, yields fell after the Fed cut its main interest rate for the third time this year and indicated another cut may be ahead in 2026. Wall Street loves lower interest rates because they can boost the economy and send prices for investments higher, even if they potentially make inflation worse.
The yield on the 10-year Treasury slipped to 4.12% from 4.13% on Wednesday and from 4.18% on Tuesday.
In stock markets abroad, indexes ticked higher in Europe after falling in much of Asia.
Japan’s Nikkei 225 index sank 0.9%, hurt by a sharp drop for SoftBank Group Corp., which is a major investor in AI.
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AP Writers Teresa Cerojano and Matt Ott contributed.