The Dow Jones Industrial Average surged more than 600 points to a fresh record close on Thursday, even as a sharp sell-off in Oracle and other artificial-intelligence (AI) plays dragged the tech-heavy Nasdaq lower. The rally underscored a powerful rotation away from crowded AI trades and into the broader market, with economically sensitive and consumer-focused stocks leading the charge.
By the closing bell on December 11, 2025, the Dow jumped roughly 1.3%, or more than 600 points, to finish at a record above 48,700, eclipsing its previous high set just weeks earlier. The blue-chip index, which has less exposure to mega-cap technology and AI names, was lifted by gains in financials, industrials and consumer stocks.
The broader S&P 500 inched up 0.2% to close at a record near 6,901, marking yet another all-time high in a year defined by robust gains across U.S. equities. In sharp contrast, the tech-heavy Nasdaq Composite slipped about 0.3% as selling in AI-linked giants offset strength elsewhere in the market.
At the center of Thursday’s market drama was Oracle. The enterprise software and cloud group stunned investors by unveiling significantly higher capital expenditure plans tied to AI infrastructure, while delivering quarterly revenue that fell short of Wall Street’s expectations. The stock tumbled roughly 10%–11% on the session, briefly putting it on track for its worst single-day loss since the dot-com bust in 2001.
Oracle reported quarterly revenue of about $16.2 billion, missing analysts’ forecasts, and sharply raised its outlook for AI-related capital spending in fiscal 2026. The combination reignited fears that AI build-out may be outpacing clear paths to profitability, pressuring not only Oracle but also semiconductor leaders like Nvidia and other data-center suppliers.
While AI-linked names stumbled, the rest of the market largely shrugged off the tech weakness. Banks and payment companies, whose fortunes are closely tied to economic growth and consumer spending, were among the strongest contributors to the Dow’s advance. Goldman Sachs climbed around 2.5%, while Visa surged more than 6%, helping power the index to its new high.
Smaller, domestically focused companies also joined the rally. The Russell 2000 index of small-cap stocks jumped about 1.2%, extending a recent run that has seen the benchmark outpace the larger-cap Nasdaq on both the week and the year. Through Thursday, the Russell 2000 was up 2.7% for the week and more than 16% year to date, compared with gains of about 17% for the S&P 500 and 22% for the Nasdaq.
Fueling the rotation has been a steady shift in monetary policy. The Federal Reserve delivered its third interest-rate cut of 2025 this week, bringing borrowing costs to a three-year low and signaling that further easing is possible in 2026 if inflation continues to cool. Lower rates tend to boost valuations for equities broadly, but particularly benefit smaller and more cyclical companies that rely heavily on credit and are sensitive to economic momentum.
Treasury markets reflected a cautiously optimistic outlook. The yield on the 10-year U.S. Treasury note edged up only slightly to around 4.14%, suggesting investors see a balance between slower inflation and still-resilient growth. That stability in long-term yields has helped support equity multiples near record levels despite lingering recession worries.
Thursday’s moves encapsulated the crosscurrents defining this market cycle: intense enthusiasm over AI’s long-term potential on one side, and growing skepticism over near-term valuations and spending on the other. Analysts warn that AI-related capex may be front-loaded and vulnerable to disappointment if revenue and productivity payoffs take longer than expected to materialize, raising the risk of an AI-flavored bubble in segments of the tech sector.
The shift out of AI-centric trades is reshaping sector leadership. Technology and communication services lagged on the day, while financials, industrials, energy and materials outperformed, reinforcing a trend toward value and cyclicals that has been building since the latest Fed pivot. Consumer discretionary names, from travel to retail, also saw gains as investors bet that lower borrowing costs will cushion the impact of high but easing inflation on household balance sheets.
The Dow’s more than 600-point leap to a record underscores that investors are no longer relying solely on a narrow group of AI and mega-cap tech winners to drive returns. Instead, market leadership is broadening, with value, cyclicals and smaller caps increasingly sharing the spotlight with the AI giants that dominated the early phase of the bull market.
For investors, that shift carries both opportunity and risk. A broader rally can be healthier and more sustainable over time, reducing dependence on a handful of richly valued tech names. But it also reflects increasing scrutiny of AI-driven spending plans and a recognition that some of the most popular trades of the past two years may be due for a reset as markets recalibrate expectations.
As Wall Street navigates a landscape shaped by lower rates, persistent inflation concerns and a still-unfolding AI revolution, Thursday’s session offered a clear message: the era of an AI-only market may be giving way to a more balanced, if volatile, hunt for growth across the full breadth of the U.S. economy.
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