The tech-heavy Nasdaq Composite Index lost ground on Thursday, as Oracle’s financial update sent investors away from many artificial intelligence-related stocks while the Dow hit a record high as investors rotated into value stocks after a Federal Reserve policy update that was less hawkish than expected.

Oracle shares sank about 11% after its quarterly forecasts fell short of analysts’ estimates and it warned that annual spending would run $15 billion higher than previously planned. This stoked fears that its big push to court AI cloud customers was burning cash faster than generating profit.

The cost of insuring Oracle debt against default surged, with the company’s shares the biggest loser on the S&P 500, and on track for their biggest quarterly loss since mid-2001. Investors fear that Oracle’s heavy reliance on debt financing could fuel an AI bubble similar to the dotcom bust of the early 2000s.

While Oracle helped drag other technology names lower,  the Dow rallied along with the Russell 2000 small-cap index, which was up more than 1%, and the S&P 500 value index, up 0.6%, was  outperforming the growth index, down 0.3%.

“The name of the game is market rotation. We’re seeing small caps, the Dow and cyclicals all start to do better in anticipation of a reacceleration of global growth,” said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments.

Investors also continued to digest the U.S. central bank’s update from Wednesday, when the Fed lowered borrowing costs by 25 basis points and Chair Jerome Powell signaled a pause on further easing. However, investors were relieved that the Fed still had two rate cuts on its dot plot as it balanced still-elevated inflation with signs of labor market weakness.

“The perception of further Fed easing is rippling across the market. The dollar is lower and the Treasury yield is lower and that’s triggering a risk-on impulse across stocks,” said Miskin. “The expectation was that the Fed would be more hawkish.”

Traders see at least 50 bps of monetary easing next year on expectations that U.S. President Donald Trump’s appointee as Fed chair is likely to be a policy dove. White House economic adviser Kevin Hassett is the frontrunner for the job.

Mixed Markets

At 2:17 p.m. EST, the Dow Jones Industrial Average rose 612.67 points, or 1.27%, to 48,670.42, the S&P 500 gained 8.61 points, or 0.13%, to 6,895.25 and the Nasdaq Composite lost 79.72 points, or 0.34%, to 23,574.44.

Communications services, down more than 1%, was the biggest percentage loser among the S&P 500’s 11 major industry sectors, while technology stocks were down 0.7% and the Philadelphia Semiconductor Index fell 1.5%.

The biggest sector gainers were materials, up 2%, financials, up 1.8%, and industrials up 1%.

Heavyweight Nvidia slid 2% while Broadcom lost 1.9% ahead of its closely watched earnings report after the closing bell.

The blue-chip Dow hit a record high, with the biggest percentage gains from Visa and UnitedHealth.

Data from the Labor Department showed jobless claims rose 236,000 for the week ending December 6, compared with estimates of 220,000.

Walt Disney <DIS.N> shares were up 1.7% after the company announced a $1 billion equity investment in OpenAI.

Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE, where there were 555 new highs and 59 new lows. On the Nasdaq, 2,601 stocks rose and 2,027 fell as advancing issues outnumbered decliners by a 1.28-to-1 ratio.

The S&P 500 posted 51 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 171 new highs and 75 new lows.

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(Reporting by Sinéad Carew in New York, and Johann M Cherian and Pranav Kashyap in Bengaluru; Additional reporting by Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli and Matthew Lewis)