Pre-Bell｜Wall Street Futures Slide; Oracle Tumbles 11%; Planet Labs Rises 17%; GEMI Jumps 14%; Nvidia, Broadcom Sink over 1%

U.S. stock index futures tumbled on Thursday after Oracle's forecasts raised fresh concerns about hefty AI spending and outweighed optimism over a less hawkish tone from the Federal Reserve.

Market Snapshot

At 7:30 a.m. ET, Dow e-minis were up 22 points, or 0.05%, S&P 500 E-minis were down 18.5 points, or 0.27%, and Nasdaq 100 E-minis were down 123.5 points, or 0.48%.

Pre-Market Movers

Oracle was falling 11% in the premarket session after the software and cloud-computing company’s guidance came in short of estimates and it raised its spending forecast. On a conference call, Doug Kehring, Oracle’s principal financial officer, said the company’s capital expenditures forecast for its current fiscal year will be $15 billion higher than it had previously projected.

Other companies exposed to the AI trade were falling. Chip maker Nvidia was down 1.7% after Oracle executive chair Larry Ellison said his company had adopted “chip neutrality” by buying Nvidia chips but also using other options if customers prefer.

Adobe was down 0.6% after it reported better-than-expected adjusted earnings of $5.50 a share from revenue of $6.19 billion in its fiscal fourth quarter. Analysts surveyed by FactSet were expecting earnings of $5.40 a share from revenue of $6.11 billion.

Synopsys fell 1% after reporting better-than-expected earnings and an outlook that beat consensus estimates. The provider of electronic-design automation software posted fiscal fourth-quarter adjusted earnings of $2.90 a share, ahead of analysts’ estimates of $2.78.

Broadcom declined 1.7%. The chip company is expected to report fiscal fourth-quarter earnings after markets close on Thursday, with expectations high after a nearly 78% gain for the stock this year.

Oxford Industries tumbled 25% after cutting its fiscal-year guidance as customers pull back on spending. The clothing company reduced its net sales guidance to $1.47 billion to $1.49 billion, down from its previous forecast of $1.48 billion to $1.52 billion.

Gemini Space Station jumped 14% after saying it had received a license to operate prediction markets. The cryptocurrency company founded by Cameron and Tyler Winklevoss said Wednesday that its affiliate Gemini Titan has received a designated contract market license.

Cisco Systems slipped 0.6% after closing at a record high for the first time since March 27, 2000, on Wednesday. The networking company has been boosted this year by excitement about strong demand for AI hardware.

Planet Labs rose 17%. The space-based Earth imaging company reported break-even per-share earnings in the third quarter on revenue of $81.3 million. Wall Street was looking for a loss of 6 cents a share on revenue of $73.5 million.

Market News

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Investors welcomed reports that SpaceX was mulling a potential IPO that would help fund Elon Musk's Mars ambitions and value the rocket and satellite company at more than $1 trillion, as some have been waiting for years to buy into the company.

SpaceX is looking to raise more than $25 billion in an initial public offering that could come as early as June, Reuters reported.

Though it is a high-risk and capital-intensive business, the demand for shares from retail investors will be "substantial," Shay Boloor, chief market strategist for Futurum Equities Research, said in an interview.

Fed Signals Pause on Rate Cuts as Investors Navigate Data Darkness and Leadership Change

After three consecutive interest rate cuts, investors now confront an uncertain U.S. monetary policy outlook for the year ahead, clouded by persistent inflation, data gaps, and an impending leadership change at the Federal Reserve.

The U.S. Federal Reserve cut interest rates by a quarter-percentage point on Wednesday in an uncommonly divided vote, but signaled it would likely pause further reductions in borrowing costs as officials look for clearer signals about the direction of the job market and inflation that "remains somewhat elevated."