Dow, S&P Close at Record Highs as Investors Rotate Into Cyclicals, Tech Lags on Oracle Slide

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U.S. stocks ended Thursday at fresh record highs for the Dow Jones Industrial Average and S&P 500, as investors rotated into banks and small caps while technology shares slipped following a sharp post-earnings selloff in Oracle. The Dow rose 646.26 points, or 1.34%, to 48,704.0, and the S&P 500 added 14.31 points, or 0.21%, to finish at 6,900.99. The Nasdaq Composite fell 60.30 points, or 0.25%, closing at 23,593.9, reflecting weakness in megacap software and cloud names. The Russell 2000 advanced 1.18% to 257.82, underscoring a continued rotation into small-cap equities.

Market breadth indicators showed broad participation: 60% of stocks advanced, more than 400 reached new highs, and over half traded above both their 50-day and 200-day moving averages. Volatility continued to retreat, with the CBOE VIX dropping 3.93% to 15.15—its lowest point in several weeks—as investors positioned for declining interest-rate risk.

Commodities sent mixed signals. Gold futures for February delivery climbed 1.68% to $4,295.70, reflecting persistent hedging demand, while crude oil fell 1.30% to $57.70 after a day-long slide tied to softer demand expectations. Bitcoin retreated 2.46% to $91,349.20.

Economic undercurrents continued to center on the consumer. According to the Bank of America Institute’s Inside Consumers' Wallets report published December 11, lower-income households “continue to face the highest inflation rates” and remain the most exposed to shifts in shelter and food costs. Oracle, by contrast, weighed heavily on the tech complex.

The Institute noted that rising rent burdens have made shelter the most persistent upward mover in consumer baskets for three consecutive years, while transportation’s wallet share has declined as gas prices moderated. The Bureau of Labor Statistics data cited in the report showed housing comprising 33% of the average consumer’s expenditures, far outweighing more discretionary categories.

The report also emphasized the K-shaped divergence in spending patterns heading into 2026. Higher-income households have expanded restaurant and travel spending from 2019 levels, whereas those earning under $50,000 have cut back on dining out and clothing, reallocating more toward groceries. Bank of America internal transaction data showed that high-income groups increased their share of spending in airlines and entertainment, while lower-income groups shifted toward necessities.

Corporate earnings added to Thursday’s crosscurrents. Adobe shares steadied after the company delivered what AInvest called a “clean beat across revenue, EPS, ARR, and cash flow.” Fourth-quarter revenue rose 10% to $6.19 billion, subscription revenue climbed 12%, and Digital Media ARR reached $19.2 billion, up 11.5%. Investor expectations for accelerating AI monetization remain high, and the stock continues to trade near its downward trendline around $340.

The company reported 14% revenue growth to $16.1 billion and a staggering $523 billion AI-infrastructure backlog, yet free cash flow turned negative $10 billion amid $12 billion in capital expenditures. Concerns around Oracle’s ability to finance more than $50 billion in annual capex for FY26 overshadowed otherwise strong cloud metrics, sending the stock down roughly 11–12% toward the $200 support area.

Despite those sector-specific pressures, cyclical leadership and easing volatility helped extend the market’s record-setting run. Financials and small caps, areas that tend to outperform in early-cycle or rate-cut environment, continued to gain traction, reinforcing expectations that equity strength could broaden beyond the handful of mega-cap growth names that drove returns earlier in the year.