Tech Stocks Rise in Late Hours on Broadcom Report: Markets Wrap
(Bloomberg) — Stocks climbed in late trading after a positive report from Broadcom Inc. helped turn the tide for tech stocks.
The Nasdaq 100 had been the only major US equity gauge to close lower Thursday as disappointing earnings from Oracle, a bellwether of the AI investment boom, weighed on sentiment for big tech. But an upbeat revenue outlook from Broadcom helped revive the AI trade sending a $413 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) higher in the afterhours.
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Other stock gauges had set new peaks during the trading session. Blue-chip and small-cap benchmarks, long laggards in the tech-led equity bull run, climbed to all-time highs. The S&P 500 clawed back early losses to climb 0.2%, a closing record and back near October’s intraday best. Bitcoin also
Shares of Broadcom rose around 3% in the postmarket. The stock has more than doubled from its April low as hyperscaler customers continue to ramp up spending.
Oracle’s results have pushed worries about tech valuations and whether heavy spending on AI infrastructure will pay off back into focus, reviving concerns that fueled weeks of volatility in November. While the sector has powered the S&P 500’s stunning rally this year, spending fears have prompted some investors to rotate into other areas as the US economic outlook remains robust.
Caution toward AI heavyweights persisted Thursday, with Nvidia Corp. falling 1.6% amid Magnificent Seven losses. Many on Wall Street are arguing its time to winnow out the AI winners from the AI losers.
Ed Yardeni, founder of Yardeni Research, recommended investors underweight the Magnificent Seven.
“The AI trade is turning into a Game of Thrones. In the past, the Magnificent Seven had their own kingdoms surrounded by big moats. They each had their unique monopolies,” Yardeni wrote. “But now they are competing with one another in the AI race, threatening one another’s kingdoms.”
After the Federal Reserve’s third straight interest-rate cut and Chair Jerome Powell’s sanguine economic outlook investors have taken comfort in Fed policymakers leaving the door open to more easing next year, even though the quarter-point cut drew three dissents. Traders stuck to bets on two cuts in 2026, even as the Fed’s new projections signaled only one such move.
US Treasuries rallied after the rate cut was paired with the authorization of fresh bill purchases to rebuild bank reserves. The gains continued after initial jobless claims rose more than expected in the Dec. 6 week, but waned in late afternoon trading as the yield on the 10-year note steadied around 4.14%.
Powell suggested that the Fed had now acted sufficiently to help stabilize the labor market while leaving rates high enough to continue weighing on price pressures. Officials upgraded their median outlook for growth in 2026, to 2.3% from the 1.8% they projected in September. They also foresaw inflation declining to 2.4% next year, from the 2.6% in the previous projection.
The dollar ticked lower. In commodities, oil retreated while silver extended an all-time high past $63 an ounce.
What Bloomberg Strategists say…
“Rather than signaling an imminent bust in tech shares, Oracle’s earnings disappointment is poised to further redefine the divide between AI winners and losers. The next stage of the AI cycle promises even more dispersion, as companies battle for a share of booming AI spending as well as superior efficiency and cost advantages on the provider side.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Corporate News
Walt Disney Co. agreed to invest $1 billion in OpenAI and license characters from Disney, Marvel, Pixar and Star Wars for use on the Sora generative video platform. A next-generation obesity shot from Eli Lilly & Co. helped patients lose almost a quarter of their body weight, potentially making the experimental drug the most potent weight-loss medicine yet. The stock rose in premarket trading. Oracle Corp. shares fell in early trading after the company reported a jump in spending on AI data centers and other equipment, rising outlays that are taking longer to translate into cloud revenue than investors want. OpenAI and its investor Microsoft were sued over a Connecticut murder-suicide in the latest case to blame the popular ChatGPT chatbot for dangerous psychological manipulation of users. Novo Nordisk A/S shares have fallen so much this year that it’s almost as if the frenzy around weight-loss drugs that propelled the Danish pharmaceutical company’s meteoric rise never happened. Coca-Cola Co. said Chief Executive Officer James Quincey is stepping down and will be replaced at the end of March by Henrique Braun, the company’s chief operating officer. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.2% as of 4:01 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average rose 1.3% The MSCI World Index rose 0.4% The Russell 2000 Index rose 1.2% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.4% to $1.1740 The British pound was little changed at $1.3394 The Japanese yen rose 0.3% to 155.61 per dollar Cryptocurrencies
Bitcoin fell 0.7% to $91,776.18 Ether fell 3.5% to $3,222.61 Bonds
The yield on 10-year Treasuries was little changed at 4.14% Germany’s 10-year yield was little changed at 2.84% Britain’s 10-year yield declined two basis points to 4.48% Commodities
West Texas Intermediate crude fell 1.1% to $57.82 a barrel Spot gold rose 1.1% to $4,274.34 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling and Sagarika Jaisinghani.
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