Yesterday’s session saw major indexes rally initially on the Federal Reserve’s 25-basis-point rate cut (bringing the fed funds rate to 3.75%-4%), but gains evaporated in after-hours trading due to disappointing results from Oracle Corp., which highlighted concerns over AI infrastructure spending and profitability. This has reignited fears about overvaluation in high-flying tech stocks, leading to broader sector pressure. Overall, the market remains supported by seasonal year-end strength and expectations of 1-2 additional rate cuts in 2026, but short-term volatility is likely as investors worry about the AI sector and Fed Chair Jerome Powell’s cautious comments on labour market risks and persistent inflation.
Oracle’s Q2 revenue miss (cloud sales fell short despite AI demand) and raised spending forecast sent shares down 11% after hours, dragging on peers like Adobe (mixed Q4 beat but volatile) and Synopsys (earnings beat but cautious outlook). Broader AI hype is cooling, with analysts warning of potential pullbacks in overextended names. Today we see increasing tech rotation risks, when there is uncertainty people sell. Yet some companies in the AI sector will win big, but there will probably be a better time to buy them. Like in 2000 some companies like Amazon declined massively before they became some of the largest companies in the world.
So I am waiting for this correction before buying, I have a list of names on my shopping list, these companies should do well in the next five years. The correction is the second wave of the bull market.