U.S. Stock Market Shows Mixed Performance Amid Record Highs

U.S. stock markets closed with mixed results on March 11 (local time). While the S&P 500 and Dow Jones indices hit all-time highs, the Nasdaq Composite fell due to Oracle's earnings shock.

The Dow Jones Industrial Average rose 646.26 points (+1.34%) to 48,704.01, marking its highest level since November 12. The S&P 500 also set a new record, climbing 14.32 points (+0.21%) to 6,901.00.

In contrast, the Nasdaq Composite declined 60.30 points (-0.25%) to close at 23,593.86. The tech-heavy Nasdaq's decline was triggered by Oracle's earnings announcement.

Oracle Plunges 10%, AI Investment Cost Concerns Intensify

The day's biggest market story was Oracle's sharp decline. Oracle shares plummeted 10.8%, recording their largest drop since late January and ranking as the worst performer among S&P 500 components.

The plunge was caused by disappointing earnings guidance. Oracle provided a current quarter outlook below market expectations and announced that annual total costs would be $15 billion (approximately 21 trillion won) higher than originally planned. This is attributed to massive investments in AI infrastructure.

Market analysts suggest that Oracle's heavy borrowing for AI investments could raise concerns about an 'AI bubble' similar to the early 2000s dot-com bubble. Oracle's credit default swap (CDS) premiums have risen, indicating growing market anxiety.

Cautious Outlook Despite Fed Rate Cut

Investors continued to digest the Federal Reserve's rate decision from the previous day. The Fed cut its benchmark rate by 0.25 percentage points as expected, but Chair Jerome Powell signaled a slower pace of future rate cuts.

Markets were relieved that the Fed's dot plot indicated some possibility of rate cuts next year. However, high inflation and signs of labor market cooling remain mixed.

The U.S. Department of Labor reported that initial jobless claims totaled 236,000 for the week ending December 6, exceeding the market expectation of 220,000. This is interpreted as a signal of labor market cooling.

Oil Prices Fall, Gold Hits One-Month High

In energy markets, crude oil prices declined. Expectations of Russia-Ukraine peace negotiations and high U.S. gasoline and diesel inventory levels contributed to the price drop.

Brent crude fell 93 cents (-1.49%) to $61.28 per barrel, while West Texas Intermediate (WTI) dropped 86 cents (-1.47%) to $57.60 per barrel.

Meanwhile, gold prices surged. As the Fed's rate cut weakened the dollar, funds flowed into the safe-haven asset.

Spot gold rose 1.2% to $4,280.08 per ounce, reaching its highest level in about a month. February gold futures closed at $4,313 per ounce, up 2.1%.

Key Market Focus Points

Oracle's earnings shock raises questions beyond simple corporate performance issues, questioning the sustainability of the AI investment boom. Market scrutiny is expected to intensify regarding whether massive capital expenditures can translate into actual profits.

Simultaneously, the Fed's cautious monetary policy stance could increase market volatility for some time. Inflation indicators and employment data are likely to become key variables determining the market's direction going forward.