Nasdaq Composite hit by AI stock slump as Oracle guidance shocks investors

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Nasdaq futures dragged by AI sell-off

Highlights

Nasdaq Composite touched 23,705 before reversing as Powell’s comments reduced expectations for further cuts.
Oracle’s spending warning triggered tech weakness, pressuring AI stocks across Thursday’s premarket session.
Nasdaq futures recovered from 20 day EMA after falling 1.5% earlier in premarket.

The pullback reflected a reassessment of the Fed’s broader message. While the rate cut had been widely expected, Powell’s tone signaled a possible pause in further reductions, which trimmed expectations for a more accommodative monetary path. He specifically noted the labor market carried significant downside risks and suggested that the Fed did not intend to tighten conditions further at the cost of job creation. Market participants adjusted accordingly, now pricing in a 78% chance of a rate hold at the next policy meeting.

Nasdaq price dynamic (Dec 2025). Source: Tradingview

In the Thursday premarket session, Nasdaq Composite futures dropped sharply by 1.5% or 390 points, to a seven-day low, erasing the earlier gains and briefly pushing the monthly performance into negative territory. This decline was aggravated by disappointing guidance from Oracle. The company projected a $15 billion increase in annual spending, triggering a sharp 11.4% premarket drop in its shares. This rekindled investor concerns about overextension in the artificial intelligence space.

Seasonal weakness and AI stock pressure weigh on tech-heavy Nasdaq sentiment

The effect of Oracle’s drop rippled across the tech sector. Nvidia and Broadcom both fell by 1.7%, while Microsoft and Amazon each slipped 0.7%. CoreWeave declined 3%, reinforcing the broader selloff across AI-linked stocks. These losses coincided with seasonal tendencies, as December often begins on a weaker footing before the final two weeks usher in strength from year-end positioning known as the Santa rally.

Despite the morning slide, the Nasdaq futures have rebounded from the 20-day EMA, recovering about 0.8% or 200 points, into mid-session. This technical support has helped maintain the index in positive territory for the month. Additionally, the Fed’s decision to begin $40 billion in Treasury bill purchases starting December 12 may provide liquidity support. The reserve management move, coming shortly after the Fed ended its Quantitative Tightening program, is intended to maintain ample reserves in the banking system and may offer a tailwind for equities in the near-term.

In recent analysis, we discussed how the Nasdaq Composite traded between 23,450 and 23,700 ahead of the Fed policy signal. A surge in Treasury auction demand hinted at stronger liquidity that could lift equities higher.

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