The Economic Times·2025-12-17 23:35Market Overview - US stocks experienced a decline, with the S&P 500 dropping 1.16% to 6,721.43, the Nasdaq Composite falling 1.81% to 22,693.32, and the Dow Jones Industrial Average decreasing by 228.29 points, or 0.47%, settling at 47,885.97. This marks the fourth consecutive negative day for both the S&P 500 and the Dow [1][11]. Company-Specific Developments - Oracle's stock fell by 5.4% following a report that Blue Owl Capital withdrew from financing a $10 billion data center project in Michigan, citing concerns over Oracle's debt and spending. Oracle has disputed this report, asserting that the project is still progressing [2][10]. - Other major AI-linked stocks also saw declines, with Broadcom dropping over 4%, Nvidia nearly 4%, Advanced Micro Devices more than 5%, and Alphabet falling over 3%. Month-to-date, Oracle and Broadcom have declined more than 11% and approximately 19%, respectively [3][11]. Industry Insights - There is a noticeable rotation from large-cap growth stocks to large-cap value stocks, as investors adopt a more defensive posture in anticipation of future market conditions. The key question being raised is who will successfully monetize the significant investments in AI [5][12]. - The rotation away from highly valued tech names into more fairly valued sectors is expected to continue into 2026, with uncertainty around monetary policy potentially leading to increased market volatility [6][12]. - Analysts are focusing on free cash flow as a critical factor in determining the profitability of AI investments, emphasizing that while balance sheets can be manipulated, free cash flow cannot [7][12]. Economic Context - Recent economic data, including the November jobs report, has influenced market sentiment, with analysts looking for signals regarding the Federal Reserve's future interest rate decisions. Fed Governor Chris Waller indicated that there is still room for potential interest rate cuts, suggesting a scope of "50 to 100 basis points" [8][12].