Asian Stocks Slip as Oracle Earnings Miss Sparks AI Profitability Concerns

Asian stock markets wavered on Thursday after disappointing earnings from U.S. cloud computing giant Oracle raised fresh doubts about the profitability of artificial intelligence investments. Oracle shares plunged more than 11% in after-hours trading, dragging S&P 500 futures down 0.3% and Nasdaq 100 futures by about 0.5% during the Asian session. The company’s weaker-than-expected revenue outlook and warnings about rising infrastructure costs signaled that AI spending may not yet be translating into strong returns, pressuring AI-exposed stocks across the region.

Japan’s Nikkei fluctuated between gains and losses, weighed down by a sharp 5% drop in SoftBank Group, a major investor in AI-related ventures. Meanwhile, Hong Kong’s Hang Seng Index gained 0.8%, lifting MSCI’s Asia-Pacific index outside Japan by 0.5%.

Market sentiment improved slightly after the U.S. Federal Reserve cut its benchmark interest rate by 25 basis points to a range of 3.5%–3.75%. Fed Chair Jerome Powell struck a balanced tone, easing concerns of future tightening and helping U.S. equities rally, with the S&P 500 rising around 0.7%. Powell emphasized that a rate hike is not the base-case scenario, prompting traders to price in at least two additional rate cuts next year and pushing the dollar lower.

The weaker dollar boosted the euro above $1.17, while the yen strengthened to 155.66 per dollar. Commodity markets also reacted to geopolitical tensions, with oil prices rising for a second day after the U.S. seized a sanctioned tanker off Venezuela’s coast, raising supply concerns. Brent crude traded at $62.53 and U.S. crude at $58.85.

U.S. Treasury yields slipped as the Fed announced plans to begin buying short-term Treasuries to support liquidity. Investors now turn their attention to the upcoming U.S. non-farm payrolls report on December 16, which may shape expectations for future rate cuts and influence year-end currency trends.