Dow Soars 500 Points as Investors Flee AI Stocks After Oracle Stumbles

CNBC and Investor’s Business Daily contributed to this report.

The Dow Jones Industrial Average blasted to a fresh record on Thursday, jumping more than 500 points, as Wall Street pulled money out of shaky AI names and piled into stocks tied to the broader US economy.

The Dow climbed 520 points (1.1%), boosted in part by a surge in Visa after Bank of America upgraded the payments giant to a “buy.” Meanwhile, the S&P 500 slipped 0.3% and the tech-heavy Nasdaq dropped 0.9%, as Big Tech dragged everything down.

The spark? A rough earnings report from Oracle, which sent its stock tumbling 14% — a huge move for a mega-cap tech company. The cloud and AI infrastructure heavyweight reported weaker-than-expected revenue and warned of higher spending ahead, raising red flags about its debt load and fueling broader anxiety about the true timeline for AI profits.

That was enough to send investors rushing out of AI-linked stocks. Nvidia, AMD and Broadcom dropped about 3% each, while CoreWeave slid 5%. On the flip side, old-school cyclical names like Home Depot moved higher as the market rotated into companies that stand to benefit from a steady economy.

“Oracle is acting like the canary in the coal mine,” said Steve Sosnick, chief strategist at Interactive Brokers. “There’s trillions committed to AI, but real returns remain hard to map.”

The AI sell-off came just a day after the Fed delivered its third interest rate cut of the year, a quarter-point drop to a 3.5%–3.75% range. Even though the Fed signaled a slower pace for future cuts, markets mostly celebrated the move — until tech earnings spoiled the vibe.

Fed Chair Jerome Powell said the central bank is positioned to “wait and see how the economy evolves,” and also noted that Trump-era tariffs have been adding to inflation pressure.

Lower rates boosted small-cap stocks: the Russell 2000 recently hit a record close, with smaller companies benefiting more directly from cheaper borrowing.

Visa grabbed extra attention Thursday after Bank of America said the company looks like a “great business on sale.” Analysts see its move into stablecoin payments as a long-term win rather than a threat.

Shares popped 3% in morning trading.

Thursday’s market mood boiled down to two forces:

1. Tech weakness, as investors question how long it will take for AI to produce real returns.
2. Optimism for the broader economy, boosted by rate cuts and strong performance from industrials, financials and consumer names.

With the Dow hitting yet another high — its first since mid-November — and the S&P 500 hovering near record territory, Wall Street seems to be betting that even if AI cools, the rest of the economy is ready to carry the torch.