Dow Futures Slip as Oracle Plunges on AI Spending After Fed-Fueled Rally

U.S. equity futures turned lower on Monday as investors absorbed a recent Fed-driven rally and reacted to a sharp sell-off in Oracle shares after the company flagged elevated AI-related spending. The overnight pullback came after markets had rallied on signals from Federal Reserve officials that suggested a potentially slower pace of policy tightening, which had buoyed risk assets late last week.

Oracle weighed on the broader technology complex after management signaled it will ramp up investment in artificial intelligence infrastructure and product development, pressuring near-term margins and prompting analysts to revise near-term profit estimates. The stock’s decline reverberated through software and enterprise IT names, prompting some traders to reduce exposure to high-valuation tech bets that had benefited from the Fed’s softer tone.

Beyond software, traders noted mixed momentum across major indices. Futures for the Dow Jones Industrial Average drifted lower while S&P 500 and Nasdaq contracts showed modest declines, reflecting a rotation toward defensives after the recent advance. Treasury yields were modestly firmer, and oil prices held steady, leaving commodity-sensitive sectors largely unchanged.

Market participants said the episode underscores the delicate balance investors face: interpreting central bank communications while weighing corporate decisions that can alter earnings trajectories. For now, the Fed’s commentary continues to set the backdrop for risk appetite, but company-specific developments — especially in AI spending and guidance — are proving capable of shifting near-term sentiment.

Analysts expect more volatility as the earnings season progresses, with investors parsing guidance for capital expenditures tied to AI and cloud infrastructure. Portfolio managers said they will monitor upcoming corporate updates and Fed remarks closely for signals on both demand trends and margin pressure. Traders also highlighted the potential for further repositioning if other large-cap tech firms follow Oracle’s lead on increased AI investment.