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U.S. stocks diverged sharply on Thursday as investors rotated out of high-flying tech stocks following disappointing Oracle earnings, while the Dow and S&P 500 hit new record highs.
Major Index Performance:
Market Drivers: The market action reflected a dramatic rotation from technology stocks into economically sensitive sectors following Oracle's disappointing results. Oracle stock tanked nearly 11% after the software giant missed on cloud sales and hiked its already aggressive data center spending by $15 billion, reviving concerns about AI overspending.
Despite tech weakness, investors remained encouraged by yesterday's Fed rate cut and Chair Powell's reassuring comments. Powell hinted that a rate hike would be off the table for January while talking up the US economy's strength
Energy sector executives convened at the Reuters Energy Live conference in Houston on December 9 identified regulatory unpredictability as the foremost obstacle to meeting America's surging electricity demand. Despite industry readiness to deploy natural gas, renewables, storage, and emerging technologies, inconsistent state regulations and shifting federal policies across administrations are significantly delaying project development.
Equinor's U.S. upstream and country manager, Chris Golden, emphasized that fragmented requirements and policy volatility substantially increase costs and timelines, hampering competitiveness for capital allocation. NRG Energy's Rob Gaudette underscored the challenge of financing multi-billion-dollar infrastructure with 30-year lifespans amid evolving regulatory frameworks across 50 states and changing federal administrations.
The uncertainty particularly affects large industrial customers and data center developers, driving demand growth. Variables, including tax incentive qualifications, carbon rule enforcement, and environmental review requirements, fluctuate with election cycles, complicating long-term investment decisions. Executives warned that without regulatory clarity, load development will migrate toward states with more stable business environments, potentially limiting deployment opportunities. Industry leaders stressed that all energy sources will be necessary to meet anticipated demand growth driven by electrification, manufacturing reshoring, and data center expansion.
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